What does "Form 1099-B Worksheet. Cost or Adjusted Basis must be entered" mean?

[FangxiaL]

Cost or adjusted basis is the dollar amount you paid for the piece of the cryptocurrency. If that information is missing, TurboTax will ask you to review and enter the information. Otherwise, the capital gain will be inflated.

Here is a help article on how to upload a CSV file of crypto transactions.

[RGR3]

I have the same issue here this a cryptocurrency, my broker send me a 1099-B, I have several charges of a x.xx amount less than 5.00 each and then it shows a COST BASIS FACTOR: 0. then 9 decimal amounts, is this the number we need to input? on each transaction? 

The charges are not sales or purchases they are charges issue to manage the cryptocurrency (No wonder those who have a Bitcoin Mining are making a killing, a few dollar and cents almost every week adds up)  so they are charges I am correct here?

Anyone has any idea what to enter in the worksheet is that decimal number I need to input?  I basically one charge per week.

Anyone any idea?  

[KrisD15]

If you can enter a summary, you can add the small amounts of fees and add a yearly total. 

If you are able to get a summary, or summarize them yourself, you can enter as "Stocks Bonds, Mutual Funds" 

(Long Term ((MORE THAN ONE YEAR)) Short Term ((ONE YEAR OR LESS))  Gain/Loss) (Date of Purchase- various)

If you are e-filing, paper-mail Form 8453 with the statement or 1099-B  you have showing the transactions, within 3 days of an acknowledgement of the acceptance of your e-filed Federal Return.

Check the box on Form 8453 for Form 8949 (the last option)

Mail Form 8453 to:

Internal Revenue Service

Attn: Shipping and Receiving, 0254

Receipt and Control Branch

Austin, TX 73344-0254 

(If you are mailing in a paper 1040, include the statement only with the paper return)

Be sure to separate any earned income (Mining, Air Drops) from trades. Enter any "Earned Income" on your Schedule C. 

TurboTax (Online) does have a separate section for reporting Virtual Currency trades, but that is just a convenience for the customer. It all goes to Capital Gains/Loss. 

DESKTOP:

Personal 

Personal Income 

I'll choose what I work on

Scroll down to "Investment Income"

"Stocks, Mutual Funds, Bonds, Other" START

Did you get 1099-B?"   NO   

Select "I'll enter a summary for each sales category" 

If you have both Short Term and Long Term, you will need to enter each on a separate screen.  

FORM 8453

[RGR3]

I understand however this are fees not purchases I have the cost based factor, so I guess I need to enter them individually basically they are expenses and should not be a Income, so in the worksheet of Turbo Tax each of them is under one line under each charge there are sales however TurboTax automatically place them under Date Sold and Sale Price 9Again they are not sales there are charges that the Grayscale BitCoin Trust BTC they apear as sales but they are NOT.

Question: what number should be on Cost or Other Basis the amount of the charge (Which is under Sale Price) or should I enter the cost base factor. (small fractional number like 0.000123456) (9 decimals)

All of them are not reported to the IRS bot Reported to the IRS under All 1099's under my broker accounts. 

There are under L=Long Term(more than a Year) in this case. 

any suggestion be appreciated! 

[RobertB4444]

@RGR3  I know this is weird but they ARE sales.  They are fractional sales of your crypto that raised the money that was then used to pay fees. 

And the fees are not deductible.  I know!

So each of those listed transactions has a cost basis in the space provided for one.  This should match the amount that you paid for the fractional amount of cryptocurrency that was sold to cover the fee you owed.  If the amount listed under cost basis does not add up to what you paid for the currency then you'll need to do some research.  You only need to pay tax on the profit from these sales so the cost basis is very important.

[RGR3]

Outstanding I think is clear.

So if it is than simple why TurboTax reading the Broker 1099-B do not just ask to the cost purchase and the date of purchase or phrase it better if they have this works providing that you are dealing with the same block group of cryptocurrencies.

So just to be clear Proceeds is equal X

Date acquired is Date acquired

Cost is Y (Price per share of cryptocurrency on date of purchase) 

Cost based Factor Z (Factor SOLD of share of Date of sold dispose)

So in the TurboTax worksheet for each individual Proceed asks for date sold (Which is the Date provided on the 1099-B from Broker) (In my case is every week) However in the top of the work sheet TurboTax asks for Long or Short term, if you indicate Long Term then the Date Acquired is fill with a "L" .

So the only left area to fill is the Cost or other Basis so here I have 3 possible values are:

Option 1 Enter the average cost of Cryptocurrency is this case is Y.

Option 2 is to enter the cost base factor which is fractional number of like you say of the sale which should be equal as the Proceed Value X which logical can't not be use I think because then Proceed and cost will then equal zero and if the IRS taxes on Proceeds then zero is not good for the IRS.

Option 3 is to enter the individual cost based factor (which is available on the 1099-B (so why TurboTax did not use it when importing the 1099-B (lazy programmers?) 

So which option  should be use? 1, 2 or 3

I also I notice that there is a bug in TurboTax I think at the top of the worksheet it ask Long or Short term but not of the individual proceeds are inserted with a L  (Just a side note) 

[RobertB4444]

@RGR3  You should go with option 3.  I have no idea why that wouldn't have imported in when you imported the 1099-B.

[RGR3]

I appreciated your prompt response. Thanks a million so the fraction number it is. 

[fonsecaalexander1]

@RGR3 

I'm in the same boat as you. Have all these small weekly fees...1 example  is .35 and cost based factor is 0.[removed]. In TurboTax, what do I put in "cost or other basis" ? It doesn't like the 9 digit number, it defaults to 0 when I type in. Do I just put in .35 ?

Thanks,

Alex

[GeorgeM777]

Do the fees you reference in your post relate to the maintenance of cryptocurrency?  Prior posts make reference to cryptocurrency.  If the fees do relate to some type of service fee in connection with holding your cryptocurrency, such fees would not be deductible.   However, if the fees relate to commissions, then those types of fees get added to your cost basis.  

To better understand your specific situation, provide additional information about the reason for the fees and the type of investments you have.

@fonsecaalexander1

[fonsecaalexander1]

@GeorgeM777 

I bought some GBTC and have not sold any of them. I have these weekly fees. Not sure to put in cost basis. I For every week I have an entry that is asking for cost or other basis.  I see AT put cost basis factor in additional information. Do I just put the .35 as "cost or other basis" field? .32 for nexty entry and so on...?

Thanks,

Alex

From TD 1099

[GeorgeM777]

No, don't put .35 as the proceeds or cost basis until you have reviewed the 2021 Grantor Trust Tax Information document.  Additionally, thank you for the follow-up information.  

The GBTC holds no assets other than BTC tokens.  Accordingly, when expenses are incurred, Trust assets (i.e., BTC tokens) are sold to cover the expenses. 

Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held in the Trust. Shareholders also will be treated as if they directly received their respective pro rata shares of the Trust’s income and proceeds, and directly incurred their pro rata share of the Trust’s expenses.

In order to calculate your 2021 taxable gain or loss from the sale of BTC to cover Trust expenses, you need to obtain the 2021 Grantor Trust Tax Information document.  That document will provide examples and a step-by- step process on how to determine your cost basis and any taxable gain or loss based on the data you have in your 1099-B.  The examples are at the end of the document, pages 15 - 17.

If you do not already have the 2021 Grantor Trust Tax Information document, you can obtain it from the Grayscale website at https://grayscale.com.  At the top of the home page select Click here for 2021 Tax Information.

@fonsecaalexander1

[tschelts]

My 1099-B has no Cost or other basis listed but has a cost Basis Factor listed under Additional Information.  This is under Undetermined Term Transactions for Noncovered Tax lots.  Ordinary gains or losses are identified in the Additional information column.  If this is the factor what do I multiply it by?

[Mike9241]

since we can't see any info that would even give us a hint, why not call the issuer?

[chenxia195]

Still the same issue here  for 2023.  A blank box asking to fill in cost or adjusted basis, but did say for which assist, or for total.  Appears to be data importing issue?

How to fix it, as Turbotax wouldn't move forward as it must find missing data?  Even manually through hundreds line by line on Broker's pdf, no single cost base was missing.