How to report crypto tax accurately when exchanges don't show my cost basis?

This is actually a common issue with crypto. The good news is you're doing it right by tracking your own cost basis! When exchanges don't know your original purchase price, they have to report the full amount as proceeds with zero cost basis. What you need to do is report the full transaction on Form 8949 (Sales and Other Dispositions of Capital Assets). You'll list the transaction as reported on the 1099 from Robinhood, but then make an adjustment with code "B" (Basis reported incorrectly to the IRS) and enter your true cost basis in the appropriate column. Make sure you keep detailed records of your original purchase - transaction confirmations, bank statements showing the transfer to the original exchange, anything that proves when and for how much you acquired the crypto. Having documentation is crucial if you ever get questions.

I had this exact same issue last year and spent HOURS trying to reconcile everything manually before I found taxr.ai (https://taxr.ai) which saved my sanity. They have a specific feature for handling crypto transactions where the reported basis is wrong. You can upload your exchange reports alongside your actual transaction history and it identifies the mismatches automatically. What I really liked is that it formats everything perfectly for the 8949 with the adjustment codes and everything. The whole process took me like 20 minutes instead of the days I was spending trying to do it manually. Plus it generates all the documentation you'd need if you ever got audited.

After struggling with multi-exchange crypto transactions for months, I finally tried taxr.ai from the suggestion above. Absolute game changer for my situation! I was about to pay my accountant an extra $300 to sort through my mess of transactions, but the tool handled everything automatically. It correctly identified all my transfers between exchanges vs actual sells, calculated my true cost basis across multiple platforms, and even flagged a few transactions I had completely forgotten about. The 8949 it generated had all the proper adjustment codes for my Kraken transactions where the exchange reported incorrect basis info. Definitely using this for 2025 taxes again.

If you've already tried reconciling with the exchange and are still having issues, you might want to try Claimyr (https://claimyr.com) to get someone from the IRS on the phone to clarify how to handle this. They got me through to an actual IRS agent in under 15 minutes when I had a similar issue with mismatched crypto reporting. The agent walked me through exactly how to fill out the forms and what documentation to keep in case of questions later. There's also a helpful video demo on how the service works: https://youtu.be/_kiP6q8DX5c I was amazed at how quickly they got me through after I'd spent literally hours getting disconnected from the IRS direct line.

I have to admit I was completely wrong about Claimyr. After dismissing it as a probable scam, I got desperate enough to try it after waiting on hold with the IRS for 2+ hours three days in a row. Not only did I get through to someone in about 20 minutes, but they actually helped clarify exactly how to handle my crypto reporting situation. The agent confirmed that using adjustment code B on Form 8949 was the correct approach and explained how to document the transaction chain from original purchase to final sale. They even emailed me some resources afterward. Saved me from a potential audit headache and hours more of research. Sometimes being proven wrong is actually a good thing!

Just want to add - make sure your Koinly report is properly calculating your cost basis using the specific accounting method you choose (FIFO, LIFO, etc). Pick one method and stick with it consistently. The IRS allows different methods but you need to be consistent. Also, if you held the crypto for more than a year before selling, don't forget that it qualifies for long-term capital gains rates, which are usually much lower than short-term rates.

Has anyone used TurboTax for this situation? I tried doing this last year and their crypto section was confusing when dealing with basis adjustments.

I went through this exact situation last year with Coinbase transfers to other exchanges. The key thing that saved me was keeping extremely detailed records from day one. I created a spreadsheet tracking every single transaction with timestamps, amounts, wallet addresses, and screenshots of the original purchases. When I filed, I used Form 8949 with adjustment code B just like others mentioned, but I also attached a statement explaining the discrepancy between what the exchange reported and my actual basis. The statement was just one page explaining that I transferred crypto from another platform where I originally purchased it, so the selling exchange had no knowledge of my true cost basis. I haven't been audited, but my CPA said having that explanatory statement along with comprehensive transaction records would make any potential audit much smoother. The IRS gets these mismatched reports all the time with crypto, so as long as you're transparent about what happened and have good documentation, you should be fine. One tip: if you're using multiple tracking tools, double-check that they're calculating the same basis amounts. I caught a small discrepancy between Koinly and my manual calculations that could have caused issues later.

I'm dealing with a very similar situation right now - bought Bitcoin on Cash App years ago, transferred it to my hardware wallet, and then moved it to Coinbase to sell. Of course Coinbase has no idea what I originally paid for it. Reading through all these responses has been super helpful, especially the advice about Form 8949 with adjustment code B. I had no idea there was a specific code for basis reported incorrectly to the IRS. One thing I'm still wondering about - if I use Koinly to generate my tax report, will it automatically format everything properly for the 8949 with the right adjustment codes? Or do I need to manually transfer that information when I'm filling out my actual tax return? I want to make sure I don't mess up the formatting since this seems like the kind of thing that could trigger questions if it's not done exactly right. Also keeping detailed records from now on - wish I had known about this potential issue years ago when I first started moving crypto between platforms!

I went through this exact same headache last year with Kraken! Here's what worked for me: First, don't panic - the IRS actually expects these mismatches with crypto transfers between platforms. The key is being proactive about documentation. I created a simple spreadsheet showing: (1) Original purchase date/price from the first exchange, (2) Transfer date to the selling exchange, (3) Sale date/price, and (4) The actual gain/loss versus what the exchange reported. When filing, I used Form 8949 with code "B" for the basis adjustment just like others mentioned. But here's an extra tip that helped me sleep better at night - I also included a brief note in the "Description" column of Form 8949 saying something like "Crypto transferred from [original exchange] - basis adjusted per records." The most important thing is consistency. Whatever method you use to calculate your basis (FIFO, LIFO, etc.), stick with it across all your crypto transactions. I've been using this approach for two years now with no issues from the IRS. Keep those Koinly reports and any screenshots/confirmations of your original purchases. If you ever get questioned, having a clear paper trail showing the crypto's journey from purchase to sale makes everything much easier to explain.