How to find the cost basis of bitcoin i own

@myraboenke thank you for the question. For background, your cost basis is the original price you paid for a coin/token, plus any transaction fees. You subtract your cost basis from the price you sold an asset for to calculate your capital gains or losses. You need to calculate your capital gains anytime you sell, swap, or spend crypto.

We want to avoid this tax treatment, which is if you don't know the historical price of your cryptocurrency, you may need to treat the cost basis of your crypto as $0. That means the entire proceeds of your sale should be treated as a capital gain.

See this on how I would go about it for all your trades:

• Start by downloading your complete transaction history from each wallet or exchange you used during the tax year.
• All this information must be combined into a single data set. Every buy, sell, trade, deposit, and transfer between accounts should be included.
• Next, you essentially need to trace the history of each token. You’ll need to find the following information for each taxable event:
• Cost Basis
• Acquisition Date
• Sales Proceeds
• Date of Sale

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Hi @myraboenke,

 

Your cost basis is generally what you paid for the asset when you purchased it. If you purchased the bitcoin within a crypto exchange, any statements they provide would show what you paid for the asset and the date of the transaction. If you purchased the crypto in another manner, you will want to review any records you have of the transaction (bank statements, etc.) to determine the amount paid for the asset and date of the transaction.

 

Beginning with tax year 2023, crypto exchanges will be issuing 1099-B forms, similar to investment/brokerage accounts. These forms will have cost basis information that the exchange is aware of. You will want to confirm with your records that these are correct, especially if you have transferred assets between exchanges.

 

This is assuming you purchased the bitcoin with US dollars (USD).

 

Here are some general tax tips for cryptocurrency: https://turbotax.intuit.com/tax-tips/tax-payments/tax-tips-for-bitcoin-and-virtual-currency/L1ZOgU00q

Thanks for your answer, but this is really bad news. I obtained most of my bitcoin before the split off of etherium years ago, and held it in a different e-wallet app, which is now defunct. I really don’t think there is a record of my original purchase transactions, except in the blockchain.  Can you help me trace that back?    

If not, I think you have confirmed my worst fears: I will have to use a basis of $0 when I eventually sell it.  

My bitcoin is all in the exchange called Mycelium. Have you heard of this? Are you familiar with whether not they would send me a statement if I sold some bitcoin?

@myraboenke I have not heard of Mycelium prior to you mentioning it.  It appears to be a self-custody crypto wallet, also known as a non-custodial wallet, which is a digital wallet that gives users exclusive control over their private keys and, therefore, full ownership and control over their crypto funds.