calculating and proving cost basis

Forum|Forum|2 years ago
November 15, 2023
1 reply
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Hi,

I have bought bitcoin multiple times on Coinbase and Coinbase pro, then moved to a Ledger wallet. If I now move it back to Coinbase, how do I calculate cost basis? Is that possible if I don't have the records? Can some software detect and calculate it for me?

thanks,

Ask the Experts - Crypto - Nov 2023

LoriLeighEA

Level 5

Thanks for joining us today, tintin_haddock!

The Cost basis of your crypto is the original price you paid for a coin/token, plus any transactions fees.

Cost basis must be known when you decide to sell, swap, or dispose of your cryptos.

You can find your cost basis by looking at your exchange records.

TurboTax has partnered with CoinTracker to help our customers with calculating and importing Crypto Transactions.

Here is a great link to assist you further:

https://blog.turbotax.intuit.com/turbotax-news/turbotax-and-cointracker-partner-to-help-you-seamlessly-calculate-and-import-crypto-and-investment-transactions-at-tax-time-50961/

tintin_haddockAuthor

Level 2

Thanks for the response, but my confusion still remains. If I have the records then why do I need CoinTracker?

Suppose I don't have the records. I just move some coins from Ledger to Coinbase and sell. I move the sell record to CoinTracker, and it'll figure out the history and calculate cost basis?

LoriLeighEA

Level 5

You would need to add your complete, all-time cryptocurrency transaction history to CoinTracker. This ensures that they have all of the data needed to correctly calculate cost basis and proceeds for each transaction.

Entering all exchanges, self-custody wallets, coins/tokens, ICOs, trades, DeFi transactions, transfers, withdrawals, and deposits allow them to reference all assets in their calculations. Leaving any transactions out, whether from previous years or because you believe they may not be relevant will skew your portfolio and will cause your tax calculations to be incorrect.

If errors do occur on some of the CoinTracker transactions, then you would have to edit the cost basis and/or proceeds. If you do not have a record of your cost basis on these transactions, then you would need to put zero.