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Cost Basis of 0 or Unrealistic Cost per Unit / Warnings in the Gains Report

It is essential, that all wallets and exchanges are properly imported into CoinTracking.

If transactions are missing, you will either have a cost basis of 0 or an unrealistic Cost per Unit for your coins.

This leads to a wrong calculation and therefore a wrong tax report!

The missing transactions are displayed as warnings in the Realized and Unrealized Gains Report

Hover your mouse over the warning symbol to see the warning: "There is no suitable purchase to this sale. Assuming purchase on the same day for 0 USD".

CoinTracking assumes a purchase price of 0 USD for the warning shown in this example, because the transfer history of this coin was not imported.  This means that transactions are missing!

When you enter coins into CoinTracking, you need to import the withdrawal from a wallet as well as the deposit to another wallet.

Example: Withdrawal of 1 BTC from Wallet A → Deposit of 1 BTC to Wallet B.

So you need to add the withdrawal from Wallet A and the deposit into Wallet B, to have a complete transfer of your coins.

If you don't import the withdrawal or the deposit of a coin, CoinTracking will assume that you have been "given" your coin for free, because it does not know where it came from or where it went.

Therefore, your coin will have a cost basis of $0.

So if you import the deposit of 1 BTC without the corresponding withdrawal, and you sell that 1 BTC, CoinTracking will assume that you paid 0 USD for the BTC.

A concrete example: 

You buy 1 BTC on 01/01/22 for $15.000 on the exchange "Coinbase" and you send it to "Kraken".

On the 02/01/23 you sell that 1 BTC on Kraken for $30.000. 

Therefore, you have made a gain of $15.000 (assuming you don't pay tax after holding your coin for 1 year or longer in your country).

Now you import your Kraken transactions into CoinTracking, but you forget to also import your Coinbase transactions.

Since you bought your BTC on Coinbase, the withdrawal from Coinbase to Kraken is missing, and you will only have a deposit of 1 BTC on Kraken.

So in simple terms: CoinTracking knows you have sold 1 BTC on Kraken, but it does not know where it was originally bought from (Coinbase) and for what amount. Therefore, a cost basis of 0 will be assumed.

And this creates the issue:

You should have had a gain of $15.000 (bought 1BTC for $15.000, sold for $30.000) but since the cost basis is now 0 you will have a gain of $30.000!

In order to solve your warnings and generate a correct tax report, you have to correct the missing transactions: White entries (no match) in Missing Transactions Report.

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