1099-DA Form Has Incorrect Holding Period and Cost Bases

[jtabc]

Hi, my crypto exchange used the wrong tax lots on my 1099-DA, so the holding period and cost bases are all wrong. I have reached out to the exchange to get a corrected 1099-DA form, but I don't expect they will produce one, or if they do, they won't produce one in time to file.

How do I handle this in TurboTax? This is what I'm thinking:

In TurboTax, for the 1099-DA, for the sales section totals:

• For "Short-term transaction with basis not reported to the IRS (noncovered)":
  • List total proceeds exactly as shown on 1099-DA
  • List total cost or other basis exactly as shown on 1099-DA
  • Select "I need to adjust my total cost basis", and enter the adjustment such that the gain loss matches what it should if using the correct cost bases.
  • For the adjustment codes, only select code B (cost basis incorrect on form).
• For "Long-term transaction with basis not reported to the IRS (noncovered)":
  • List total proceeds exactly as shown on 1099-DA
  • List total cost or other basis exactly as shown on 1099-DA
  • Select "I need to adjust my total cost basis", and enter the adjustment such that the gain loss matches what it should if using the correct cost bases.
  • For the adjustment codes, select both codes B (cost basis incorrect on form) and T (type of gain or loss is incorrect).

Is this how you would handle the situation, assuming the exchange will not provide an updated 1099-DA form? Am I doing anything wrong?

[JamesG1]

You are entering the IRS form 1099-DA or IRS form 8949 using the sales section totals method in TurboTax Desktop Premium. 

This is the method that I would recommend to report the correct basis which is not reported on the IRS form 1099-DA.

You mentioned that the holding period is also incorrect.  Are you recommending to report the correct holding period for the transactions rather than the holding period reported on the IRS form 1099-DA?  

For instance, even thought the IRS form 1099-DA reported $100 short-term and $100 long-term, you are reporting the correct holding periods of $50 short-term and $150 long-term?  I would support this method.  

Hopefully, the corrected form will be received.  In any case, retain all documentation that you used to generate your reported income including gain/loss reports and sales records should a tax authority have questions at a later time.