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Crypto Reconciliation (Form 8949)

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  • Crypto Reconciliation (Form 8949)

People often have questions about crypto taxes, and most importantly how to correctly calculate the cost basis for the cryptocurrencies. What is the cost basis? Simply put, the cost basis is the FMV [fair market value] at the time of purchase. This is otherwise known as your purchase price. Now, this can become difficult to track when it comes to cryptocurrencies due to the nature of decentralization. 

 

The problem

The issue is many exchanges don’t have a tracking system to properly account for the cost basis – they are either too low or have zero value when you attempt to reconcile your own trading. You end up overpaying taxes if you don’t reconcile your cryptocurrency ledgers. 

 

A possible solution, which often does not work

There are quite a few tools available online that attempt to solve this issue – software packages that compute your cost basis and generate the 8949 for filing purposes. However, the output is often incorrect or confusing and in desperation, many clients reach out to us. 

 

The real solution

Fortunately, our experience with crypto reconciliation is both personal and professional. Many of our clients trade cryptocurrencies on numerous exchanges (Coinbase, Binance, Gemini, Kraken, KuCoin, Crypto.com, etc). We helped our clients adjust the cost basis which resulted in thousands or even millions in tax savings. If you think you overpaid taxes for prior years or would like to get ahead of your taxes for an upcoming (or late) filing, simply reach out to us. We will get your crypto reconciled for you in a neat, accurate 8949 for tax filing purposes. 

 

We handle all types of complexities, including exchanges that have closed (or are frozen), forks, rug pulls, air drops, money moved from hard wallets or other types of wallets, NFT trading & minting, crypto mining, DeFi income/staking, etc. 

 

Simply reach out below for assistance. 

 

Need help with your books?

Call us today at (866) 656-8036, email us at info@dimovtax.com, or fill out the form and we’ll get in touch immediately.

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