Need Help Understanding Crypto Taxation in the US for Long-Term Global Trading

This is actually a common situation for crypto traders moving to the US. First, understand that cryptocurrency is treated as property by the IRS, not currency, which means every sale or exchange is a taxable event with capital gains implications. For your situation with thousands of prior transactions, you have a few options. First, try to gather as much transaction history as possible from your exchanges - many allow you to download CSV files of your trading history. There are also specialized crypto tax software platforms (like Koinly, CoinTracker, or TaxBit) that can help organize your transaction history by connecting to exchange APIs or importing CSV files. If you truly can't reconstruct your complete history, the IRS generally expects you to make a good-faith effort. Document your methodology for estimating your cost basis. The "first-in, first-out" (FIFO) method is commonly accepted, but you need to be consistent. When you transfer to Robinhood and eventually sell, Robinhood will issue a 1099 showing proceeds, but without your cost basis. You'll need to report that cost basis on your tax return. If your records are incomplete, document your best estimation method.

I was in a similar situation last year with hundreds of crypto transactions across different platforms. After weeks of struggling with spreadsheets and missing data, I found https://taxr.ai which literally saved my sanity. Their AI can analyze your trading history across multiple exchanges and help establish a defensible cost basis, even with incomplete records. What impressed me was how it handled my situation where I had moved coins between wallets multiple times and lost access to one exchange. The system identified patterns in my trading history and helped reconstruct a timeline that made sense. They also provided documentation explaining the methodology used for calculating gains, which is super important if you ever get questioned by the IRS.

I thought taxr.ai sounded too good to be true, but I tried it after seeing the recommendation here. I'm honestly blown away by how well it worked for my situation. I had been trading since 2017 and lost access to two exchanges that shut down, plus had wallet transfers I'd completely forgotten about. The system matched transactions across different platforms that I hadn't even realized were related, and provided me with detailed documentation explaining how they calculated my cost basis. I was able to file my taxes with actual confidence instead of just guessing and hoping I wouldn't get audited. The best part was when my accountant reviewed it and said the methodology was sound and defensible - he was impressed with the level of detail. Wish I'd found this years ago!

If you're having trouble reaching the IRS to ask about your specific situation (which I definitely did when dealing with my own crypto mess), I recommend using https://claimyr.com to get through to an actual human at the IRS. Check out how it works here: https://youtu.be/_kiP6q8DX5c I was skeptical at first, but after waiting on hold for 3+ hours multiple times and getting disconnected, I was desperate. Claimyr got me connected to an IRS agent in about 30 minutes. The agent actually gave me specific guidance on how to handle my crypto situation with limited documentation, which saved me a ton of stress and probably prevented issues down the road.

I have to eat my words and apologize for being so skeptical about Claimyr. After my frustration post, I decided to try it anyway because I was desperate to talk to someone about my crypto tax situation before filing season ends. To my complete shock, I got connected to an IRS agent in about 40 minutes without having to sit by my phone the whole time. The agent walked me through how to properly document my "best effort" at determining cost basis for crypto from exchanges that no longer exist. They confirmed that using historical price data with whatever transaction records I could find was acceptable as long as I documented my methodology. This saved me countless hours of stress and worry. I'm actually going to sleep better tonight knowing I've got a proper plan for handling this on my tax return.

Something else to consider - when you transfer your crypto to Robinhood, that's not a taxable event (it's just moving your property). But the moment you sell on Robinhood, that's when the taxable event occurs. Also, Robinhood's tax forms will show the proceeds from your sale but won't have your cost basis information for crypto transferred in. They'll likely issue a 1099-B with your proceeds, but the cost basis section might be blank or listed as "unknown," which puts the responsibility on you to report the correct cost basis on your tax return. If you significantly underreport your cost basis, that's where audit flags might come up since the IRS will see a mismatch between your reported gain and what they'd calculate based on zero cost basis.

Don't overlook the fact that if you've been trading crypto while a permanent resident but before becoming a citizen, you still have US tax liability on those gains. The US taxes residents on worldwide income. Also, be aware that transferring between cryptocurrencies (like trading Bitcoin for Ethereum) counts as a taxable event too - each swap is technically a sale of one asset and purchase of another. This catches a lot of people by surprise.