Forgot to report crypto losses from 2021 on tax return - what can I do now?

I lost a pretty significant amount in crypto trading back in 2021 but never included any of this in my tax filings. Honestly, I was so frustrated about the losses that I kind of just wanted to forget about the whole thing and didn't think it mattered since I didn't make any money. Now I'm wondering if I should have reported these losses and if there's anything I can/should do about it now. Can I still claim these losses somehow? Would the IRS even care since I didn't make money on crypto? Also, quick question - if someone makes ZERO capital gains in a year from crypto trading (no profit at all), do they still need to report or mention the 0 capital gains on their taxes? Seems unnecessary to me but I don't want to mess up again. Any advice or guidance would be greatly appreciated!

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19 comments

Liam Mendez

•8M

You should definitely consider filing an amended return (Form 1040-X) for 2021. Capital losses can offset capital gains, and if your losses exceed your gains, you can deduct up to $3,000 against your other income. Any remaining losses can be carried forward to future tax years. Even if you made zero gains, you're still technically required to report all crypto transactions on your tax return. The IRS considers cryptocurrency to be property, so buying, selling, or trading it creates a taxable event that should be reported on Schedule D and Form 8949. This is true even if you had no net gains for the year. The good news is that you can still amend returns from the past three tax years, so 2021 is still within that window. You'd need to gather all your transaction data and calculate your cost basis and proceeds for each transaction.

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Liam Mendez

•8M

Filing an amended return doesn't automatically trigger an audit. The IRS reviews amended returns like any other return. If you have proper documentation of your crypto transactions, there should be no issues with claiming legitimate losses. Regarding whether it's worth it - that depends on your specific situation. If you had a substantial loss (well over $3,000), you could potentially deduct $3,000 each year until the loss is used up. For example, if you lost $9,000, that could be a $3,000 deduction for three years. At even a 22% tax bracket, that's $1,980 in tax savings over time.

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Jacob Smithson

•8M

I was in a similar position last year where I had missing crypto transactions from previous years. I spent HOURS trying to organize all my transactions from different exchanges and figure out the cost basis for everything. It was a nightmare until I found this tool called taxr.ai (https://taxr.ai). I uploaded my exchange statements and transaction history, and it organized everything automatically. It identified all my trades, calculated the cost basis, and even found some wash sales I wasn't aware of. The best part was that it generated all the forms I needed for my amended returns. Made the whole process way easier than I expected, especially for someone who isn't great with tax stuff like me.

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Jacob Smithson

•8M

Yes, it definitely handles multiple exchanges! I had transactions spread across Coinbase, Kraken, and even some DeFi platforms. You can import from all of them, and the tool reconciles everything to avoid double-counting transactions that might appear in multiple places. For accuracy, it was spot-on for my needs. The difference from other tools I tried is that it doesn't just import - it actually analyzes the data and flags inconsistencies. When I had missing transactions (like transfers between wallets), it prompted me to provide that info instead of just calculating wrong numbers. It also lets you review everything before finalizing.

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Isabella Brown

•8M

Just wanted to follow up about taxr.ai that was mentioned earlier. I was skeptical but decided to give it a try with my mess of crypto transactions from different exchanges. It actually worked amazingly well! I had over 200 transactions from 2021-2022 across Coinbase, Binance and a hardware wallet - thought I'd never sort it all out. The tool imported everything, matched up transfers between wallets correctly, and calculated my losses accurately. Just filed my amended return last week for my 2021 losses (about $7,800 total). Should get almost $700 back from my 2021 taxes plus I can carry forward the remaining losses. Definitely worth the time to fix this!

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Aiden Rodríguez

•8M

If you're still trying to get this sorted and need to talk to the IRS about your specific situation, good luck getting through to them! I spent DAYS trying to reach someone about a similar crypto reporting issue from a prior year. Constantly on hold, disconnected, or told to call back later. Finally used a service called Claimyr (https://claimyr.com) that basically holds your place in the IRS phone queue and calls you when an agent is about to answer. They have a video demo here: https://youtu.be/_kiP6q8DX5c showing how it works. Saved me literally hours of waiting on hold. I was able to speak with an IRS agent who confirmed exactly what I needed to do for my amended return with crypto losses.

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Aiden Rodríguez

•8M

It's not that the IRS officially "allows" it - the service basically automates the process of calling and navigating the IRS phone tree. It holds your place in line, and when it detects that an agent is about to pick up, it connects you. The IRS just thinks you've been waiting on hold the whole time. I was definitely skeptical too! I had tried calling the IRS four times before this and couldn't get through. But I was desperate to get my question answered about amending multiple years with crypto losses. The service called me back in about 50 minutes when an agent was ready (after telling me the estimated wait was 3+ hours). Totally changed my perspective on dealing with the IRS.

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Ava Kim

•8M

I need to eat my words about Claimyr. After my skeptical comment I decided to try it anyway since I needed to ask about my crypto losses from 2019-2021. Normally I would've given up after being on hold for 30 minutes, but with this service I just went about my day. Got a call back in about 2 hours saying an agent was ready, and I actually got through to someone who was super helpful. They confirmed I could still amend my 2021 return for crypto losses but 2019 was too far back. The agent gave me specific guidance on how to document everything properly to avoid issues. Saved me from making some mistakes on my amended return AND saved me from wasting hours on hold.

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Ethan Anderson

•8M

I had to provide complete transaction histories showing how and when I acquired each cryptocurrency, the price I paid, when I sold, and the proceeds received. The biggest issue was with tokens I got through ICOs where I had paid in ETH but didn't have clear documentation of the ETH value at the exact time. For exchanges that don't exist anymore, try to gather as much evidence as you can - email confirmations, bank statements showing transfers to those exchanges, screenshots if you have them. The IRS was actually somewhat understanding about the difficulty of perfect record-keeping in crypto, but they definitely wanted to see that I made a good faith effort to track everything.

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Ava Martinez

•3M

I was in almost the exact same situation! Lost about $8k in crypto in 2021 and completely ignored it on my taxes because I was so frustrated. Finally bit the bullet and filed an amended return (Form 1040-X) last month. The process wasn't as bad as I expected. You definitely should report all crypto transactions even with zero gains - the IRS considers each trade a taxable event regardless of profit/loss. I gathered all my exchange statements, calculated my basis using FIFO method, and filed the amendment. Already got my refund for the $3k loss deduction against my 2021 income, and I can carry forward the remaining $5k to offset future gains or take another $3k deduction next year. Don't let the paperwork intimidate you - it's worth doing especially since you're still within the 3-year window to amend 2021.

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