really need to mail physical copy of 1099-da? - celsius

[Aminy]

I have a 1099DA where the cost basis is unknown, because this is due to the Celsius bankruptcy.   

from turbotax:  "How do you plan on submitting your 1099‑DA to the IRS?

You'll need to mail a paper copy to the IRS."

I've even tried experimenting with different in puts and it always say that for any 1099DA.  Actually. turbotax requests a bunch of information on the DA  (do I edit in Adobe?) which I do not and cannot have:

"Take a moment to double-check that your statements are complete. For each sale listed, there should be:

• A description
• Date acquired
• Date sold
• Sales price
• Cost basis
• Gain or loss for each sale
• A sale category based on how the sale was reported to you and the IRS"

However none of that is listed on the 1099DA because paypal has no insight, and the original company went bankrupt, - also much of that info I literally cannot know, because I don't know when my GUSD was converted to BTC.   

Questions: Am I supposed to make up my own 1099da with this info?   Do I really need to mail a physical copy of my own sort of 1099da where I've shoved in estimated cost-basis values?  Seems like this should all by handled by 8949, but this is where turbotax is ducting me.

[AmyC]

1. No, you don't make up your own form but you do provide the proof.

• The 1099-DA is new for 2025 and the way basis is calculated was changed Jan 1, 2025 to be accounted for by wallet or account only. Prior to that date, the IRS did require that you keep a spreadsheet of your investments with your date purchased, sold, basis, gain, loss and any other information to do your taxes. 
• Starting in 2026, the 1099-DA will contain basis for you. Although, it is still a good idea to keep track of your investments due to odd things that can happen. You do need to determine your basis and have proof. Otherwise, the IRS deems your basis to be zero. 
• Let's work on the basis you need for this year. 
  • If a transaction says covered - the issuer does know the basis and it may be reported on your form. 
  • Noncovered -you are responsible for the basis and can determine it by: reviewing transactions, using a blockchain explorer to trace wallet address back to date of acquisition and crypto tax software can help match transfers.
  • create a log to use with your return and either upload or mail to the IRS. Again, basis of zero for things not found.

2. It depends: If both of these are true, you do not need to mail the form along with your log:

• Check your form 8949 for exception 2 or code M if you summarized transactions on your return rather than listing all of them
• you  uploaded a .pdf of your transaction log to attach to your return.

Otherwise, you need to mail a copy of your 1099-DA and supporting paperwork (your log) with the form 8453 within 3 days of your return being accepted.

[Aminy]

There are no logs - the company is bankrupt and records are not available.   Best I have is a screenshot showing my account total when they went bankrupt.  I had GSUD converted to BTC with not input from me as a function of the bankruptcy.   In this case there is no way to track the transactions even through Koinly etc hence there is no evidence of any kind of cost basis.   The mere fact I'm receiving celsius-related funds is the best proof I have that I'm just recovering my own money (i.e. this is not a gain). 

Practically, I'm not sure that mailing a physical copy 1099 (as turbotax demands) will do anything clarify any of this for the IRS, when I myself have spent days try to figure out the situation.  A few hundred thousand people are dealing with this same situation.  

[AmyC]

You have a screenshot! It shows your FMV at a specific point in time. This was a forced liquidation. Your value before is shown - proven versus the proceeds of what you received to show a capital loss.

Let's make a log:

Cost Basis - The GSUD is stable and you don't need a log to prove xGSUD =$x. Your screenshot is your proof.

Date acquired will be the date you deposited into Celsius (or estimate)

Date sold - use the bankruptcy date or when you received the BTC

Proceeds - FMV of the BTC on the day you received it

If the IRS asks for more: 

bank statements showing the outgo of funds

emails: statements, reward, balance - shows you actually were the owner

Two final thoughts:

1. Ionic digital stock has a separate basis - if you received it.

2. If you decide to mail the 8453, it may go a long way to include a brief statement explaining the records were lost due to the Celsius bankruptcy and that you used available data to reconstruct the basis in good faith.

[Aminy]

Helpful info, thank you - you say "if I decide to mail the 8453" - are you suggesting I just organize the info, put in my cost basis in the 8949, and see if IRS has questions it?  

There is no way to efile and attach a pdf/screenshot and say "Dear IRS, check this out if you doubt me about the cost basis." ?

I'm just wondering if voluntarily supplying more info about the forced liquidation etc just invites more scrutiny vs just listing the actual cost basis, and being prepared with the proof IF IRS wants more.

[AmyC]

1. Yes. You have to organize your stuff and use it for your taxes. You have to give the IRS your log whether it is attached or mailed. You will wait a few years and see if they ask. The IRS has trained over a thousand agents in the last year or two on handling sch D issues and the logs.

2. You are right about adding a message and potentially flagging it: but, it can also be preventive measures. Personally, I would not add it but for some people, they feel better. It sounds like you are in my camp.

Side note: your issue is one that many are dealing with so the IRS may have to work out a method and your screenshot was brilliant. I don't expect you to have a big problem.

[Aminy]

Thank you - closing in on a course of action.

Practical question - you said " You have to give the IRS your log whether it is attached or mailed. "  I can have entries in the 8949 with the celsius refunds (for amounts listed on the 1099DA) and their cost basis.   However it seems you're indicating something more.

For my personal log of those transactions (which is just the same list of transactions and amounts) you're saying I should attach that too?  It's just the same info, all over again. 

How would I do that?

[AmyC]

We started this with the reasons you have to file the 8453. Double check what you are doing against the rules I listed above. You may not need to attach or mail anything. That would be a big win! You are doing great!

[Aminy]

You said: "It depends: If both of these are true,"  but then there was a bunch of stuff above that wherein it was not possible to infer the conditions.  So I'm not sure what exactly you're referring to as the criteria for needing an 8453.  If you could clarify, then I'd know what to do.

[DianeW777]

Best action is to attach your log or other document showing your buys and sells with Form 8453, since you likely made summary totals on your return. Check Form 8949 on the form.

If you are e-filing your tax return, then mail your statements along with Form 8453 to: 

Internal Revenue Service

Attn: Shipping and Receiving, 0254 

Receipt and Control Branch 

Austin, TX 73344-0254

If you need a blank Form 8453, you can download this pdf, enter your address information and check the box for Form 8949 (this form is really just a cover sheet).  How do I mail Form 8453? 

@Aminy 

[user17736349294]

Hi, in the input section of Form 1099DA, I didn't see a place to enter exception code, Please show me how to do it. Thanks.

[DianeW777]

An exception code may not be part of the entry process, however you should be selecting the correct applicable checkbox on Form 8949 or a holding period with basis reported to IRS, if applicable. If basis is not reported to the IRS this will require mailing

If you select 'The cost basis is incorrect or missing on my 1099-DA' this will require mailing.

Review your entries to determine if you are required to mail your forms to the IRS.

@user17736349294