NMWHFIT GBTC corrected 1099-B

[ds--]

I received corrected 1099-B, all the numbers from boxes 1a-1e are the same.

The only addition is : NMWHFIT ADDITIONAL WRITTEN STATEMENT

In there only "Cost Basis Adjustment" contains data. Its for a single security GBTC, and the total is −53.22

But the column has a note at the bottom:

Represents a Cost Basis Factor supplied by the Trust on a Per Share Basis. You may need to determine your total Cost Basis adjustment by applying this factor to the number of Trust Units held.

So it seems I need to adjust the basis of the 1099B, but given 115 shares were sold it needs to be 115*53.22? That would make my basis negative. Am I reading this right?

Also where do I enter this adjustment, is it on the wizard step "Select any less common adjustments that apply" ?

Thank you!

One way to calculate is as below, but it doesn't make sense that the loss is more than ever was spent buying this fund:

1. Total Cost Basis Adjustment = Cost Basis Factor per share x Shares Sold

   1. Total Cost Basis Adjustment = -53.22 x 115

   2. Total Cost Basis Adjustment = -6,119.30

2. Adjusted Cost Basis = Original Cost Basis - Total Cost Basis

   1. Adjustment Adjusted Cost Basis = $4,834.65 - (-$6,119.30)

   2. Adjusted Cost Basis = $10,953.95

3. Gain/Loss = Proceeds - Adjusted Cost Basis

   1. Gain/Loss = $1,023.41 - $10,953.95

   2. Gain/Loss = -$9,930.54

[hbl3973 · Accepted solution]

ds--,

Is this the Grayscale Bitcoin Trust you are talking about?  If so you should take a look at

https://grayscale.com/wp-content/uploads/2023/01/Grayscale-BTC-Annual-Reporting-12.31.22-Final.pdf

to see how they calculate the 1099-B they sent.  It may well be that you multiple by 115 in the end.

On the bigger picture side, when adjustments to cost basis reduce the cost basis to zero and below, which is most frequently seen with return of capital by real estate and utility companies. the cost basis remains zero, but you are subject to capital gains taxes on the amount that would have been below zero.  If the investment was the bitcoin one, the reported loss on the 1099B would need to be split into the loss that drove your investment basis to zero and the rest of the loss turned into an adjustment that reduced the total loss.  Whew.

[ds--]

thank you, yes it is the Grayscale Bitcoin Trust.

I've read what you wrote 3 times but its way over my head. May need 10 more readings... If you happen to have seen a step by step for this I would really appreciate it! 

What a mistake this came to be ...

[hbl3973]

ds--,

Page 15 of that PDF purports to be a Step by Step.  And yes, I agree, the bitcoin world produces tons of headaches.  The free AARP Tax-Aide service will not prepare a return for anyone who owns any financial interest in bitcoins and other related digital assets.

[ds--]

for anyone else who comes across this post - wealthfront made a spreadsheet calculator available for 2021, which they decided not to update for 2022. However, its easily adoptable. 

[miotter]

I have the same issue. I think between the info i got on my NMWHFIT Additional Written Statement and Grayscale EOY Tax form, I've figured out my adjustments.  In order to adjust my cost basis on my taxes now, do I now click the button that says my cost basis was wrong on my 1099 and go ahead and change it, or is there any other place this is supposed to go? Thanks

[hbl3973]

miotter,

Yes, click on the button that the cost basis was wrong and enter the correct basis.  Yes, TurboTax accepts a negative cost basis in that correction field.