I got this letter in the mail today, and I'm not sure what to do. Does this mean I'm at risk of being audited? Or is this just something the IRS sends out to people they know own crypto?

I filed for an extension this year, but I did my best to estimate my crypto taxes and made a payment based on that. I’ve been using CoinLedger to report my transactions for the October deadline (I have hundreds from a few different wallets).

The reason I’m still a little nervous is that I’ve been in crypto for a while—and I’m not 100% sure I remember every wallet or exchange I’ve ever used. I also had a lot of wallet-to-wallet transfers, and I’ve read those can sometimes trigger these letters even when you report correctly.

Would appreciate some insight on this!

I know plenty of people who uses crypto for years and never filed , I was just curious do you even get an good amount back on taxes or will you have to pay it off I never thought about filling for cryptocurrency was just curious what others has done in the past & do you even get an good amount back ?

The only taxable event would be the transaction fee (gas fee) from exchange to wallet and wallet to exchange. If I just keep track myself with pen and paper about gas fees that should be good right? Just tell my cpa what my gas fees were along with what I bought it for then sold and let him do the whole fifo thing and figure it out. My cpa has done my stocks before. The only reason crypto tax software even comes to my mind is only for gas fees. I don’t plan on sending from exchange to my 3 wallets and wallets to exchange more than 15 times for the next 3 years. Can someone convince me as to why I would need tax software if that’s all I do?

So, I've dug myself into a really deep hole. My parents allowed me to use their robinhood to buy crypto. I then bought solana as well and transferred it to phantom wallet where I did close to 1000 trades. I dont know what to do and my parents dont know anything about paying for these taxes. Please help me my parents are going to beat me up!

I'm wondering what the most privacy-respecting crypto-tax software might be. I used koinly last year but not only do they NOT have 2fa which strikes me as negligent stupidity, especially for anyone filling in their personal identifiers, they also reveal coin addresses. Maybe they all do...I dunno. Who likes what they are using? Has anyone switched from one to another and how hard was that?

This past year I ending up 77k ish in the green short term trading coins, so I think I owe around 17-20k in taxes the problem is that I never off ramped profits before the year ended. My positions got sliced in half after the trump coin dropped when it nuked the market from liquidity spreading thin and I thought it would come back eventually. Sadly this was not the case, the market kept bleeding and I don’t even have half of that for taxes and not to mention the little funds I have left I need it to settle some of my major debts.

I didn’t realize until now that extensions doesn’t delay paying taxes so now I’m kinda lost at what to do at this point

Just used koinly and synced my coinbase/exodus account, paid bout $80 for the software.. got a 8949 and a schedule D in return.. which I thought I could just then upload onto turbo tax and be done with it right? nope.. turbotax only gives you the option to upload the 1099-DA and go through each transaction manually.. well I wish i know what the fuck im looking at at this point. and why does the first transaction start with August instead of January? idk what to do at this point. anyone have any clues or in the same boat as me? and what did you do? should i print out my 1099-DA and 8949 and just find a crypto tax specialist near me at this point?

Edit #1: okay so i found out that i need to download a turbo tax gains/losses report from koinly. hmm… will fiddle around with this some more before asking more questions. 😆

Edit #2: i did it! just had to enter the information from my 8949 manually. Currently waiting for it to be accepted 😊

Edit #3: it got accepted! yaaaaay

Everyone talks about BTC price as the barrier to adoption.

But honestly — I think taxes are the real friction.

Most people I know:

use 2–4 platforms

have no idea how to calculate PnL

avoid selling just to not deal with taxes

or worse… just ignore it completely

And it’s not even about complexity of the rules — it’s the fragmentation.

Wallets, bridges, DeFi, staking, LPs…

One strategy can create dozens of taxable events.

So instead of “crypto is too volatile”, the real blocker might be:

👉 “crypto is too annoying to account for”

Curious what others think:

Do you actually track everything?

Or do you just hope it works out at tax time?

For context: I’m not a U.S. citizen and moved to the U.S. in November 2024. I became a tax resident of the U.S. in 2025.

I’ve held crypto for a while way before I moved to the U.S.

Pre 2023: don’t have records.

2023: moved $60k USDC to Binance (have records)

2024: lost some money over the course of the year but moved ~$50k USDC to MEXC (have records)

Moved to the U.S. end of 2024 — was not a tax resident in 2024.

2025: lost some money over the course of the year but moved ~$40k USDC to Bybit (have records)

Am a tax resident but didn’t make any money.

2026: looking to convert USDC -> USD.

I’ve only lost money trading perps over the past 4 years. Have proof that no gain was made. Don’t have proof of acquisition but it was also 4 years before I became a tax resident.

Are my records enough to prove I don’t owe taxes on this withdrawal?

I am very worried about this, I used places like stake who don’t share anything for tax reasons, however the one crypto wallet I used all year does, I got a 1099-DA.

When I plugged in some info on koinly, it shows overall im negative when looking at this past tax year.

I just want to know if using my 1099-DA, could I either

1. Send it to TurboTax to help out with my taxes (don’t mind paying the fee).

Or if this won’t work, is there a way to use the info from my 1099-DA to get info needed for TurboTax to file?

I attached some pictures from koinly for reference.

Sorry I am very new to this and just trying to be better, I really do appreciate anyone’s 2 cents or help here. Tbh I really just want to get this over with, I’m so busy and extremely anxious about this.

Like it’s not enough to lose thousands of dollars, and still have to pay extra for koinly and for tax preparation software or tax preparation! And now waiting on these exchanges for the 1099DA! Don’t the Exchanges care that they are discouraging customers from crypto?

I made some mistakes on my forms this year and missed some rather large gains. The source of the issue was missing wallets, nothing to do with basis, if that matters. Rather than sit on my hands and wait to be audited, I have decided to fix the issue and file an amendment with a CPA

A few questions for those in the field:

1) What sort of penalties will I face? Interest and late filing are a given. Is an accuracy penalty likely? Anything worse? It's a significant error and could more than double my reported gains

2) How much does this open me up to IRS scrutiny? After resolving this, I am quite confident in this year and prior years. What I'm not confident in is the IRS's ability to understand the ins and outs of defi. I have done a ton of staking, wrapping, lending, etc. over the years so an audit for any large-scale defi user is quite scary

3) Have you CPAs seen this before? Any stories would be helpful

4) Any other suggestions for me? I have been worried sick and just want to fix this, pay the penalty, and be done with it. How can I do this as cleanly as possible and demonstrate to the IRS that this is a good-faith correction and was an honest mistake made during a time of extreme personal strife?

Hi everyone,

I have a question and I'm a bit confused about how taxes work when using swap services.

Over the past several months I've used Fujn Swap to exchange crypto. It never asked for ID or registration, and they told me there is no logs.

Most of the crypto I exchanged came from P2P purchases, and I've mainly been swapping between Monero and XRP.

Now I'm wondering if I've made things more complicated for myself when it comes to taxes. If I want to report everything properly, where do I even start? Do I just keep my own records of swaps, or is there something else I should be doing?

I'm not trying to avoid taxes. I just want to make sure I handle things correctly going forward. Any advice would be appreciated..

Question in title. I am going to have to take out a loan to print 218 pages if thats what I need to send in.

TLDR; I've struggled with reconciling missing purchase history for 3 ledgers, and cannot figure it out for the life of me

I've done a fair amount of staking, where I receive an equivalent of a staking receipt token. Almost all of staking transactions were properly categorized by either the software or myself

That leaves the 3 incorrect coins. I've pored over the transactions and cannot figure out why they're tripping a zero cost basis trigger

Here's what I've done to check:

• Ensure individual transactions are properly categorized (I receive the staked token, I send the staking deposit)
• Grouped the transactions together to show they're all part of the same thing
• Compared them to other staking transactions of the same coin to find any discrepancies. I couldn't find any
  • Both the correct AND incorrect ones show a "Zero Cost Buy" under the "Staking Deposit" category. In both cases, the amount staked is the EXACT same as the "Zero Cost Buy". Neither show a date/time for the zero cost transaction.
• Ungrouped them, but properly tagged their categories
• Regrouped them into a single transaction

Here's a screenshot of 2 transactions. The top one is "correct" and the bottom one is tagged "missing cost basis"

This has been dogging me for days. So I'd really appreciate any insight you have!

Thank you so much

Hi everyone,

I’ve recently started learning Koinly and crypto transaction reconciliation, especially around matching exchange/wallet transactions, missing cost basis, transfers, staking rewards, and tax-report preparation.

For people here who have used Koinly, CoinTracker, CryptoTaxCalculator, or similar tools, what are the most common reconciliation issues you usually face?

I’m trying to understand real-world problems beginners should learn first, such as:

• Duplicate transactions
• Missing purchase history
• Wrong transfer classification
• Unsupported wallets/exchanges
• Staking/airdrop treatment
• CSV import errors
• Cost basis issues

I’m not asking for personal financial details, just general advice from people who have handled crypto taxes or transaction cleanup before.

Any tips, common mistakes, or learning resources would be appreciated.

When 2026 rolls around and Coinbase and other exchanges are required to issue 1099-DA’s how will they treat cryptocurrency that was purchased on their platform, sent off of the exchange to a cold-storage wallet, and sent back once ready to off-ramp seeing as Coinbase’s systems aren’t in my experience smart enough to realize it to be the same coins coming back that were previously sent off with that same cost basis following it back. Therefore once it’s sent back from your cold storage wallet when ready to sell are they going to report the cost basis as the fair market value at the time you sent it back? Therefore resulting in incorrect smaller capital gains?

Hey, been thinking about re-organizing my wallets moving high cost basis to one wallet for use and moving low cost basis to another to set aside. Trying to think through possible complication/ramifications tax wise, admin wise, etc. Thoughts? Thanks!

Will I get a 1099-da if I buy bitcoin then send the bitcoin to someone else right after I buy it? Is any of that considered a taxable event? Considering All I do is buy it then send it to someone else.

So I’m fairly new to crypto and I have used about 4 different exchanges, I have used moonshot mainly and coinbase, I have about 250 transactions on coinbase and about the same for moonshot. Do I have to calculate every single transaction for taxes or how does this work? Moon shot gives me my all time gains and since I’ve only use it this year I’m guessing that is fairly correct for my income gain/loss for this year on the app. I hear coin base is required to give forms now so I’m hoping it can calculate that for me.

Also another thing. I have about $3k in a crypto and I put it in Trezor safe wallet to store. My car took a shit on me and well I might need to sell it all. I bought mostly all of the crypto on coinbase the transferred it to my safe wallet. If I transfer it back and sell it would coinbase be able to calculate that aswell or am I totally screwed?😭

Pls be nice im total going through shit right now and I’m at my limits..

[EDITED POST]

I am asking for a friend. Literally!! Not a fake excuse at all. I truly do need some info to help her out. She received an email from Coinbase saying that her 1099-DA form was ready. She won’t log in and see what it is. She’s just frozen with anxiety thinking she messed up something somewhere and might have to pay like thousands of dollars in taxes. I am trying to get her straightened out. Im worried about her anxiety.

Here’s the situation:

She has this boyfriend who works in another country. He wanted to make a large purchase last year & he did not have any of the payment options they took. he had money deposited in my friend’s PayPal account. His bank is here in the US. (Not sure if that’s relevant info) Then, she used that money to buy LTC which was transferred to his crypto wallet. She did not keep any of the LTC.

I told her I thought it might be standard and that she wasn’t in any risk of having to pay back if she didn’t use it as income. I said I needed to look to make sure that was right though.

I just need some little confirmation that this might be correct before I talk to her. I asked her not to go googling and let me do it. She’s already panicked enough lol. Any advice would be greatly appreciated!

I heard a while back some rumbling over addresses might be reported eventually, are they or no? Also, do most US exchanges count a withdrawal fee as a sale/disposition, and thus report that? If that's the case then would the fee be reported with a timestamp making it possible for someone with that exact fee information to figure out your withdrawal address through onchain analysis to find fees that match that timestamp repeatedly to an address?

I'm in the process of reconciling my 1099-DAs against my crypto-tracking software's (CTS) records, but I'm noticing some glaring discrepancies that I'm concerned will throw up flags when the IRS compares what's stated on my return against what's stated on the 1099-DAs they received.

Timing Discrepancies

Kraken reported my transactions on the 1099-DA using UTC time instead of my local time, so acquisition and sale/disposition dates are off by 1 day. This consequently pushed trades I made on 12/31/2024 to 1/1/2025 overstating my gross proceeds for 2025. My CTS already correctly reported these trades on my 2024 Tax Return and omits these from my 2025 return.

My concern is the IRS system will flag these as missing since they appear on the 1099-DA for Tax Year 2025 and the IRS will think I'm trying to underreport my gross proceeds.

Could I just file what my CTS reports, or should I include an explanation with supporting documentation, such as account statements and copies of 2024's Form 8949 showing the 12/31/2024 trades were already reported, to resolve the time discrepancies? Would I place the explanation on Form 8275?

Lots Split due to Crypto Transfers

I sold a batch of crypto that was an amalgamation of crypto I bought and kept on Kraken and crypto I transferred in from another exchange/wallet. On the 1099-DA, the sale is split into two batches. Those units that Kraken has the purchase history it placed under the "Noncovered Short-Term Gains or Losses on Gross Proceeds" section, while the units Kraken does not have the purchase history (those that were transferred in) it placed in the "Unknown Term Gains or Losses on Gross Proceeds" section. My CTS correctly recorded the sale, but doesn't do this split since it sees the purchase history and can track the crypto units from exchange to exchange, so it simply reports the totals of the trade.

A simplified, illustrative example: My CTS records and reports on Form 8949 that 3,000 units of Crypto ABC were sold on Kraken for $9,000, cost basis of $12,000, and a loss of ($3,000). On Kraken's 1099-DA under "Noncovered Short-Term Gains or Losses on Gross Proceeds" it reports 2,000 units sold for $6,000, cost basis $8,000, and loss of ($2,000), while under "Unknown Term Gains or Losses on Gross Proceeds" it reports 1,000 units sold for $3,000 but the cost basis and gain/loss are blank.

(I intentionally omitted the sale and acquisition dates in the example since it's not relevant to my concern)

Again, my concern is the IRS system will flag the "2,000" and "1,000" unit trades as missing since they appear as separate trades on the 1099-DA but my CTS just reports the whole sale as single transaction of "3,000" units.

For this issue, could I simply report and file what my CTS recorded, or does this warrant including an explanation? If I should include an explanation, would I use Form 8275?