calculating and proving cost basis

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/

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?

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.

but then I don't understand what's the point of CoinTracker. If I have all the transactions, then why do I need CoinTracker? I can calculated the cost-basis myself.

Hi tintin_haddock,

You are correct that you don't need to use CoinTracker if you don't want. If you are confident that you can calculate the cost-basis yourself, then you are fine to do it that way. CoinTracker is for those who don't have the knowledge/expertise to do it themselves. Or, if they do, they don't want to spend the time themselves or choose to use it to double-check their work.

 

TurboTax has a new crypto center you might be interested in. I encourage you to check it out!