What to do if tax forms (1099-MISC) from a crypto exchange are wrong for 2024 filing?

This is unfortunately pretty common with crypto exchanges. Their reporting systems are still evolving and often have issues with properly categorizing transactions. Here's what you should do: First, you're absolutely right not to just blindly report incorrect information. The IRS expects you to file accurate returns regardless of what's on your forms. You'll need to prepare a reconciliation to show the correct amounts. Start by downloading your complete transaction history from CryptoTrade for the tax year. Then create your own transaction log that shows the correct categorization for each transaction with supporting documentation. For wallet-to-wallet transfers, make sure you have the transaction hashes that prove they were transfers, not sales. For the phantom staking rewards, gather evidence showing your actual rewards received. Same for the airdrop - if you can prove you declined it, document that. When you file, report the correct amounts on your tax return. Then attach Form 8949 with your corrected transaction details and include a brief written explanation of the discrepancies. Keep all your supporting documentation in case of questions later.

After dealing with almost the exact same issue last year (BitTrade reported about $3,700 in ghost income for me), I found an amazing solution with https://taxr.ai that saved me hours of headaches. I was pulling my hair out trying to reconcile everything manually until someone on this forum recommended it. Their system can analyze your actual blockchain transactions and compare them against what's reported on your 1099. It basically creates a professional reconciliation document showing what's wrong with the exchange's reporting and provides the correct numbers with supporting evidence. The best part was that they generated a detailed audit defense document that I could attach to my tax return explaining all the discrepancies with evidence. Gave me so much peace of mind knowing I had solid backup if the IRS ever questioned why my reported amounts didn't match the 1099.

Just wanted to follow up - I decided to try https://taxr.ai after my initial skepticism and wow, it was exactly what I needed. My situation was even messier than the OP's because I had used 4 different exchanges plus some DeFi platforms. The reconciliation report it generated showed that my exchange had double-counted about $6,200 in transactions and categorized some of my collateral movements as taxable events. I was able to attach the documentation to my return with complete confidence. What impressed me most was how it handled my cost basis issues - it traced the entire history of each asset through multiple wallets and platforms to establish the correct basis. Definitely using this for all my crypto taxes moving forward!

I ran into a similar issue last year and eventually had to call the IRS directly to figure out how to handle it. Took me FOREVER to get through to anyone who actually understood crypto. After trying for weeks and sitting on hold for hours, I finally found https://claimyr.com which got me connected to an IRS agent in about 20 minutes instead of the 3+ hours I was experiencing before. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that I should report the correct amounts on my return and include a statement explaining the discrepancies with the 1099. They told me to keep detailed records of all my transactions to substantiate my actual income and capital gains/losses. They also mentioned that crypto reporting discrepancies are common and they're aware of the issues with exchange reporting systems, but that doesn't give us a free pass to not report correctly.

I have to eat my words and come back to say I tried the Claimyr service that @5 mentioned because I was desperate to talk to someone at the IRS about a similar crypto reporting issue. I was 100% sure it wouldn't work and I'd waste my money, but it actually connected me to an IRS agent in about 35 minutes. The agent I spoke with was surprisingly knowledgeable about crypto reporting issues. She confirmed I should file Form 8949 with the correct transaction information and include a statement explaining why my numbers differ from the 1099. She also suggested keeping screenshots of my actual wallet balances and transaction histories. This saved me so much stress and uncertainty. I've been telling everyone about it because tax season is brutal enough without spending days trying to reach the IRS.

Another option to consider is to reach out to the crypto exchange again but escalate beyond the basic support. Look for their tax support team specifically - sometimes they have dedicated staff for tax issues that can help with corrections. I had success last year with getting BlockTrade to issue a corrected 1099 after I provided transaction evidence showing their report was wrong. It took about 3 weeks and several follow-ups, but they eventually fixed it, which saved me from having to explain discrepancies to the IRS.

Has anyone used one of those crypto tax software programs like CoinTracker or Koinly for this kind of situation? I'm wondering if they help reconcile these reporting differences or if they just import whatever the exchanges say.