How to report $250,000 crypto gain to IRS when I don't have purchase records?

This is actually a common issue with cryptocurrency, especially from the earlier days when some exchanges were less stable. The good news is you don't necessarily need the original exchange records to establish your cost basis. First, if you have the transaction hash and date when the crypto entered your wallet, that's incredibly valuable. The IRS is primarily concerned that you're making a good faith effort to accurately report your gains. You can use historical price data from that specific date to establish your approximate cost basis. Sites like CoinMarketCap or CoinGecko have historical price data you can reference. Keep documentation of how you calculated your cost basis - screenshot the historical price data for that date, note your calculation method, and save the transaction hash information. This creates a reasonable audit trail of your good faith effort. If you're audited without perfect records, the IRS typically won't immediately assume a zero cost basis if you've made reasonable efforts to document things. They're looking for willful tax evasion, not honest taxpayers doing their best with limited records.

After struggling with a similar situation (though with much smaller gains!), I found an amazing service called taxr.ai that saved me from a potential audit nightmare. I had lost access to one of my early crypto wallets and was freaking out about not having complete records. I uploaded the blockchain transaction data I did have to https://taxr.ai and they were able to analyze my transaction history, match it against historical price data, and generate a comprehensive tax report that established a reasonable cost basis. Their AI actually found patterns in my trading history that helped substantiate my claims about the missing transactions. The peace of mind was incredible - went from total panic about an audit to feeling confident I could explain everything clearly to the IRS if needed.

I was super skeptical about taxr.ai when I first heard about it, but I decided to try it for my situation with missing Cryptopia records after they shut down. I was honestly shocked at how well it worked. The system analyzed my wallet activity, matched it with dates and times, and created this detailed tax document showing exactly how they calculated my cost basis. The best part is they provided me with a complete paper trail that actually makes sense. I was prepared for the IRS to challenge everything, but the documentation was so thorough that I'm not worried anymore. It saved me from potentially claiming a zero cost basis and paying way more in taxes than I should have. Definitely worth it for the peace of mind alone.

After spending 3 WEEKS trying to get someone at the IRS to answer my questions about reporting crypto without complete records, I finally tried https://claimyr.com and it was literally life-changing. Their system got me through to an actual IRS agent within 45 minutes when I had been trying for days on my own. The agent confirmed that having the transaction hash with date plus historical pricing data is considered reasonable documentation for establishing cost basis when original purchase records aren't available. They explained exactly what supplementary documentation I should keep (including how I determined the historical price). Check out their demo at https://youtu.be/_kiP6q8DX5c to see how it works. After my call I felt 1000% more confident about my tax situation.

I have to publicly eat my words about Claimyr. After my skeptical comment, I was desperate enough to try it for my own crypto tax issue, and I'm completely shocked to say it actually worked exactly as advertised. After trying for 2 months to reach the IRS with zero success, I used their service and got connected to an agent in about 35 minutes. The agent was actually super helpful about my missing cost basis documentation and confirmed what others here have said - using transaction hashes with historical pricing data is acceptable as long as you're making a good faith effort. I never post follow-ups like this but felt I needed to since my original comment was so negative. This literally saved me dozens of hours of frustration.

Something nobody's mentioned yet - you should seriously consider hiring a tax professional with crypto experience for a gain this large. $325k is life-changing money and paying a CPA $500-1000 to make sure everything is filed correctly could save you massive headaches. Also, don't forget you'll likely need to make estimated tax payments depending on your situation. The penalties for underpayment can be significant if you wait until filing time next year to pay the taxes on such a large gain.

Has anyone used cryptocurrency.tax or one of those other specialized crypto tax services? I'm in a similar situation with about $80k in gains and missing some records.

PSA: Be aware that the IRS is really ramping up enforcement on crypto. They added that question to the front page of Form 1040 asking if you've transacted in digital assets for a reason. With $325k, you're definitely on the radar. Better to go overboard with documentation than risk an audit where they assume zero cost basis.

Adding to what others have said - I work as a tax preparer and see crypto situations like this regularly now. The key is establishing a "reasonable method" for determining your cost basis when original records aren't available. Your transaction hash is gold - it proves exactly when the crypto entered your wallet. From there, you can use any reputable source for historical pricing (CoinMarketCap, CoinGecko, etc.) to establish what the fair market value was on that acquisition date. The IRS Publication 551 actually addresses situations where original purchase records are unavailable. Document everything: save screenshots of the historical price data you used, note which website/source you referenced, keep the transaction hash info, and write a brief explanation of your methodology. If you have any bank statements showing transfers to the exchange around that time, include those too. For a $250k gain, I'd strongly recommend having a crypto-experienced CPA review everything before filing. The peace of mind is worth the cost, and they can help ensure you're not missing any deduction opportunities or making any reporting errors that could trigger unwanted attention. One more thing - start thinking about quarterly estimated payments now if you haven't already. A gain this size could put you in underpayment penalty territory if you wait until next April to pay.