Why is the cost basis on my Coinbase API so far off? How is the cost basis figured? I sent most of my coins from private wallets, so they should have a zero cost basis.

Turbo Tax does not calculate basis, that is entered by the user, The program will calculate gain or loss for you. If you imported your transactions, you need to verify that the correct basis was imported. If your cost basis is zero then any money made is pure gain and fully taxable.

Pub 550 covers investment income.

If you have a foreign wallet,  that is considered a foreign asset and may require filing Form 8938. See About Form 8938, Statement of Specified Foreign Financial Assets.

I wasn't able to input my cost basis. It was automatically figured by connecting TurboTax to my Coinbase Pro API. Is this an issue on TurboTax's side or Coinbase? I have almost 1,000 transactions that have to be changed to a zero cost basis. Does TurboTax have a mass edit option? It would take me at least one day to manually change each cost basis. 

 

Turbo Tax does not calculate basis.  If you imported your transactions, you need to verify that the correct basis was imported. 

 

TurboTax does not have a mass edit function.

 

Do you have an ability to download a brokerage statement or proceeds statement and elect to report summary information?

 

Your brokerage statements should include a summary of your transactions, grouped by sales category, for example, Box A short-term covered or Box D long-term covered. You will enter the summary info instead of each individual transaction.

 

1. At the screen Let's import your tax info screen, select Enter a different way.
2. Step through the interview and select Sales section totals when prompted to choose how to enter your sales
3. You will now be able to enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Continue
4. You can add additional sales totals by selecting the Add another sales total on the Review your sales section totals screen.

If you choose the option to enter a summary instead of entering each sale, The IRS requires that you mail a copy of the brokerage statement listing the individual sales.

 

If you e-file, TurboTax will produce an IRS Form 8453. You print the IRS Form 8453 and attach the brokerage statement(s) to it.

 

If you file by mail, attach the statement(s) to the back of your tax return, after all the forms and schedules.

 

In either case, click the mailing instructions link in the message at the bottom of the TurboTax page and follow the instructions that it displays.