Missing Crypto Cost Basis: How One Holder Rebuilt It

Missing Crypto Cost Basis: How One Holder Rebuilt It

Illustrative anonymized composite, drawn from recurring patterns rather than a single engagement. The firm named below was not involved in it. Every dollar figure, coin quantity, price, tax rate and timeframe is invented and rounded. Nothing here is guaranteed or predictive.

Missing crypto cost basis is what happens when you sold coins and cannot show what you paid for them. If basis cannot be shown, the sale can end up taxed as if the coins cost nothing. In this composite, a long-term holder sold three coins for $150,000, had no records from the exchange that had closed years earlier, and faced a taxable gain of the entire amount.

Crypto Tax Made Easy, a New Jersey firm that lists Cryptocurrency Investors among its specialties, is the kind of firm a holder in that spot might ask about. Crypto Tax Made Easy is a vetted Sam's List member and a paying member of our featured program; payment does not buy the language we use or its reviews.

How a Holder Ended Up With Missing Crypto Cost Basis

The holder bought coins on a single exchange in 2018 and 2019, moved them to a hardware wallet, and then did nothing for years. The exchange later shut down. Its website was gone, the login email no longer worked and the account history went with it. The holder remembered paying roughly $30,000 in total across three purchases but had no statement showing quantities, prices or dates.

In the year of the sale, the holder sold the three coins for $150,000 through a new exchange. That exchange could see the coins arrive and the sale, but not what had been paid for them. The tax form it issued showed proceeds and, in the basis box, nothing.

The limitation: a blank basis box does not mean the basis is zero. It means the broker did not know. The burden of showing what you paid generally rests on you, though, so a blank box left unaddressed can become a zero in practice.

What Missing Crypto Cost Basis Would Have Cost

The tax difference between no basis and a supported basis is the whole reason this matters. With nothing to support a cost, the holder would have reported a $150,000 gain. With the $30,000 actually paid, the gain would be $120,000.

Item	Zero basis	Rebuilt basis
Proceeds	$150,000	$150,000
Cost basis	$0	$30,000
Reported gain	$150,000	$120,000
Tax at an assumed 15 percent	$22,500	$18,000
Difference		$4,500

The 15 percent rate is invented for illustration. Real long-term capital gain rates run from 0 to 20 percent depending on income and filing status, and a net investment income surtax or a state tax may also apply.

The limitation: the table assumes every dollar of the $30,000 can be shown. Often only part of it can, and the amount you can support is what counts.

Crypto Exchange Records: Where Evidence Still Exists

When the exchange's own records are gone, the evidence is usually somewhere else. The holder and a preparer started with the places that outlive a company. Bank statements show the transfers sent to the exchange, with dates and amounts. Email archives and password-manager entries sometimes still hold purchase confirmations. An old tax return may show an earlier year's reporting. Crypto exchange records may also be requested from a successor company or the bankruptcy estate, if there was one, though that can be slow.

The blockchain is the other source. Each deposit into the hardware wallet is a permanent public record with an amount and a timestamp, which can be matched to the bank transfers. Historical price data for those dates is available from public price histories, so a purchase can be dated and priced from sources other than the exchange.

The limitation: none of these records says "I bought this coin at this price." Each shows part of the story, and a preparer has to connect them. Be careful with any one source, because price histories differ between providers and timestamps may be in different time zones.

Crypto Cost Basis Reconstruction, Lot by Lot

Crypto cost basis reconstruction means rebuilding the list of purchases, called lots, with date, quantity and cost for each. The preparer built three rows. The first two had a bank transfer, a matching deposit into the wallet a day or two later and a surviving email confirmation, which together supported $24,000 of the cost.

The third lot, about $6,000, had a bank transfer and a matching wallet deposit but no confirmation. The preparer used the bank amount as the cost, since a fee paid on a purchase generally adds to basis, dated it to the transfer and wrote a short memo on how the figure was reached and which sources it rested on. The memo went in the file, not on the return.

The limitation: a reconstruction is only as good as its weakest lot. The $6,000 lot rested on a bank record and a matched deposit, which is reasonable evidence but not proof of what the exchange charged. The holder chose to report it and accepted the risk of a question.

What Held Up and What Did Not

In the composite, the return reported $30,000 of basis, with the three-lot schedule and the memo kept in the file. The preparer explained that if the IRS asked, the file would show how each number was reached, and that the weaker lot might be challenged. The holder agreed to keep every source document in one folder, including the screenshots of the blockchain entries and the dates they were captured.

Nothing in the composite guarantees that this reasoning would be accepted. Taxpayers who truly lose records are sometimes allowed a reasonable estimate, but the standard depends on the facts and the evidence, and a record built after the fact is weaker than a contemporaneous one. A holder with no bank records, or a different sale, might not be able to do as much.

The limitation: reconstruction takes time and may cost more in professional fees than a small basis difference is worth. For a $30,000 cost against $150,000 of proceeds, it was clearly worth doing. For a $500 purchase, it may not be.

The Habit That Prevents the Problem

The lasting fix was ordinary. The holder now exports the full transaction history from every exchange once a year, before any platform has a chance to disappear, and stores the files with the bank statements for the same year. Each wallet has a one-page note of what is in it and where the coins came from. When coins move between wallets, the move is logged on the day it happens.

That habit has become more important. Under current IRS guidance, basis is generally tracked wallet by wallet, so a record that says which coins are in which wallet is the starting point for each future sale. A broker's form will not fill the gap for coins it did not hold.

The limitation: records kept from now on do not fix the past. A gap before the habit began still needs the kind of reconstruction described above.

Where Crypto Tax Made Easy Fits

Crypto Tax Made Easy is based in Little Silver, New Jersey, serving clients nationwide. Its live profile lists Cryptocurrency Investors, Digital Nomads and High Net Worth Individuals as specialties. It was not involved in this composite.

Crypto Tax Made Easy has 6 verified client reviews on Sam's List as of 2026-10-02. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Crypto Tax Made Easy is a paying member of our featured program, and payment does not buy its reviews. Ratings and rankings are not indicative of future performance or results.

Ask whether the firm has rebuilt basis from bank and blockchain records, how it documents a weak lot and what it would need from you to start. The limitation, plainly: the profile does not mention cost basis reconstruction or missing records by name, so ask what is included. No firm can create evidence that does not exist, and the outcome depends on what you can still pull. You can also browse accountants on Sam's List to compare others.

Frequently Asked Questions

What happens if I have no cost basis for crypto?

The sale may be treated as having no basis, making the whole proceeds a gain, unless you can support a cost. A blank basis box on a broker form only means the broker did not know. Ask a tax professional how to document what you paid.

Can I reconstruct crypto cost basis from bank statements?

Often partly. Bank records show transfers to an exchange, and blockchain entries show when coins arrived. A preparer can match them and document the method. Reasonable estimates are sometimes accepted when records are truly lost, but acceptance is not guaranteed.

Where can I find old crypto exchange records?

Check email archives, bank and card statements, old tax returns, saved CSV exports and any successor or bankruptcy administrator of a defunct exchange. The blockchain shows deposit dates and amounts, but not what you paid. Collect all of it before you file.

Does a 1099-DA show my cost basis?

Not always. Brokers generally report gross proceeds for 2025 and basis only for certain covered assets acquired from 2026. For older coins, the basis box may be blank, and your own records have to supply it. Confirm what applies with a preparer.

If you are about to sell, gather every record you can find before you do: bank statements, old exports, emails and wallet addresses. List what you bought, when and for how much, and mark the gaps. You can browse accountants on Sam's List, including the firm above, and ask each how it handles missing basis.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.