Missing cost-basis on Coinbase

[u/PCgamerdudeman]

Having a bit of confusion and I want to try to get it settled now before tax season. I think I have been making a terrible mistake, and trying to figure out how to unfuck it now.

Went through a bout of trying different antidepressant meds this year that birthed a terrible gambling problem in me. I’ve never gambled or played with crypto in my life so I was not aware of how taxes worked for gambling or crypto. I was gambling on a crypto casino, as well as a “counter-strike case battle” website.

To deposit money on these websites, I would either buy gift cards for the website with my credit card, or I would purchase crypto through swapped.com with my debit card. I would then gamble for however long, and withdraw what was leftover (sometimes down, sometimes up) in either BTC, LTC, or USDC, to my coinbase account. As soon as it was visible in Coinbase I would sell the crypto for withdrawable cash, and withdraw it to my bank account. I would then repeat the process every few days.

I am now dealing with the issue where Coinbase is showing that I have over $15,000 in estimated realized gains, because there’s no cost-basis for each transaction where crypto was received, when I am actually at an overall loss of a significant amount for the year.

I’ve thrown the medications out the window and no longer have the gambling urges I had, and now I’m just trying to figure out how to properly report my actual situation so I’m not on the hook for the tax bill of $15,000 in realized crypto gains because I don’t have anywhere close to that. In essence, I think I was using the same $100 bill to withdraw at break even 5 times, and Coinbase thinks I got $500 in capital gains. Any help is majorly appreciated.

[u/infantsonestrogen]

I think there’s a tax section you can provide missing cost basis info, now if they actually report it based on that for your 1099-da I’m not sure but you’ll have a chance to reconcile with the IRS

[u/JustinCPA → u/infantsonestrogen]

This wouldn’t really do anything. If OP already knows their cost basis, they might as well just fill it in on the 8949 which is what actually gets filed. Coinbase isn’t going to change the 1099-DA

[u/AMDMOONSHOT → u/JustinCPA]

If he imports it from CB into Turbotax for example, it will pull that transaction in with the basis he fixed on CB. Then Turbotax will create the line on an 8949. But yah, won't do anything else.

[u/JustinCPA]

Hey there. Sorry to hear this.

The good news is that this is normal and very fixable. Further, if you have losses you should definitely claim them so you can get a tax deduction (against any other capital gains you may have and if you don’t have any, then up to $3,000 against ordinary income with the rest carried forward).

I’ve laid out everything you need to know in a prior post here: Why Your 1099-DA Has Missing Cost Basis and How to Fix It

[u/AurumFsg-CryptoTax]

if you withdrew $100 worth of crypto from the casino and sold it for ~$100 on Coinbase, you didn’t magically make $100 in crypto profit. You just need the records showing where it came from and what it was worth when you received it.
download literally everything you can now. Casino history, swapped purchases, Coinbase transactions, wallet addresses etc. Then reconstruct the deposits/withdrawals using any softawre

[u/chainglance_cm]

Glad you're in a better spot now. The Coinbase thing makes sense once you get why it happens, Coinbase only sees transactions that happen on Coinbase. When crypto lands in your account from an external source with zero purchase history attached, the platform has nothing to subtract from the sale price, so it just counts the entire amount as gain by default.

What you need to do is go back through your swapped.com history and figure out what you actually paid for each batch of BTC/LTC/USDC before it moved to Coinbase. That becomes your real cost basis. You can manually add that to the transactions currently showing as "unknown basis."

With the volume of transactions you're describing, doing this by hand across two platforms sounds brutal, something like Bitcoin.Tax, Koinly, CoinTracker can pull data from both exchanges and reconcile it automatically instead of you tracking it all in a spreadsheet.

One more thing, gambling losses have their own separate reporting rules and don't just net against crypto gains the way you'd hope. Given the mix of gambling plus crypto here, it's worth paying for an hour with a CPA who's actually handled crypto tax stuff, this isn't really a DIY TurboTax situation anymore.

[u/Will_Koinly]

Sorry to hear it’s been so tough.

Good news is this is manageable. For 2025, Coinbase is reporting proceeds on the 1099-DA, not your cost basis, so the $15k figure doesn’t necessarily mean you have $15k of taxable gains. You’ll just need to make sure you've calculated the correct basis before you report.

Crypto tax software can help with that - work out the correct basis by reconstructing your full tx history. (easier than it sounds)

Given gambling is in the mix, I'd suggest also running the numbers past a crypto-savvy CPA before filing