Why cost basis goes missing
- Coins transferred into an exchange arrive without their purchase history, so Form 1099-DA shows proceeds with no basis.
- Exchanges that shut down or changed ownership took their transaction histories with them.
- Self-custody wallets, DeFi activity and years of small trades were never tracked in one place.
Where we rebuild it from
- Exchange exports (CSV files and API data) from every platform you used, including ones you no longer log into
- Blockchain records for your wallet addresses, which permanently show every transfer in and out
- Bank and card statements showing the dollars you sent to buy crypto
- Emails and confirmations from exchanges, especially for platforms that no longer exist
The rules we apply
- Since January 1, 2025, basis must be tracked wallet by wallet, not pooled across everything you own. Revenue Procedure 2024-28 provided a one-time safe harbor for assigning existing basis to each wallet.
- If you didn't identify which units you sold, first-in, first-out generally applies.
- Where records are incomplete, we build a documented reconstruction from the best available evidence. Basis you can't support at all can be treated as zero, which is why documentation matters.
What you get
A reconciled transaction history, corrected Form 8949 reporting, and a workpaper that explains how basis was determined, ready if the IRS ever asks. For the bigger picture, see The 1099-DA Trap.
Frequently asked questions
How do I reconstruct crypto cost basis if my exchange shut down?
Use whatever evidence remains: emails and confirmations from the exchange, bank statements showing your purchases, and blockchain records for coins withdrawn to your own wallets. A CPA can assemble these into a documented basis.
What happens if I can't prove my crypto cost basis?
Basis you can't support can be treated as zero, meaning the entire sale price could be taxed as gain. A documented reconstruction is usually far better than reporting no basis.
Does Form 1099-DA show my cost basis?
Only for assets bought in that account on or after January 1, 2026. Coins bought earlier or transferred in usually show no basis, so you must supply it.