Saturday, October 3, 2020

Lost trading history and sloppy record keeping of BTC and crypto for tax

First of all, sorry for the long post. I am in a bit of a pickle and it is a rather long and complex problem and I want end of it so I can continue to sleep at night.

I have only just heard about the laws that crypto-crypto trades are a taxable event as coinbase emailed me saying they are handing over my account trade history to the taxman I am starting to question how the hell I have ended up with my BTC holdings, and if I need to pay them (because I really want to stay out of trouble). I have been very sloppy and stupid with record keeping over the years and I am now paying the price, but I believe I never exceeded the 12K CGA profit so I never submitted a tax return. I am really struggling to understand what I paid for each partial part of my entire portfolio ? I am particularly struggling to match transactions in a cost basis related way for example, what I paid for the particular BTC that eventually hit the exchange, and was 'diposed of', cost basis terms.

Given I have thousands of transactions on around 5 different exchanges and physical brokers, some I have no longer access to. I bought physical BTC straight to my cold storage paper wallets and also into exchanges, conducting lots of complex movement processes, in and out my paper wallet and exchanges. I have now lost details of that paper wallet and I traded altcoins from bitcoins back and forth mainly making losses and some gains along the way. I had the likes of NEO, EOS to name a few from binance to desktop wallets and paper wallets. I later down the line then decided I wanted a fresh start after the brutal bear market and keep all my funds safe on a ledger in BTC for simplicity. I converted all my altcoins into BTC, sold for a massive loss and shifted it onto my ledger. After that I have just been DCA into my ledger and doing a little bit of trading, making some loss and some gain.

I have probably racked up around 2000 complex transactions from brokers and exchanges, trading with different altcoins, some without knowing or able to accurately prove how much I paid for them at that particular timeframe. All I certainly know is the X amount I have totally put into BTC. Its a clusterfuck of transactions and I have no clue what I could prove or disprove if a legal event were to occur.

I really hate how they introduced crypto-crypto transactions being a taxable event, if I knew this from the outset, I would have never touched altcoins and just stuck to sitting on bitcoin and doing some simple trading here and there. I want a fresh start and I want to pay what I owe if I do owe anything.

What worries me is if I cannot prove the price I paid on average from my crypto, how will I know how much CGT to declare if I come to sell? All I know is how much money I have invested and how much crypto I have sitting on my ledger and exchanges.

I have looked into using software but there will be massive gaps from the phyiscal BTC I bought, and the exchanges I no longer have access to, so how would I go about accurately calculating all of this? I am lost and completely frozen as to where to start here, and I would really appreciate some guidance.

TL;DR Lost access to trade history, lots of transactions in and out cold storage, paper wallets, conversions to altcoins, moving said altcoins to offline wallets and desktop wallets, moving back in to sell, move to ledger, move some funds to exhanges for trading small amounts. How do I calculate this??


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