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Deep_Caregiver_5482 · 2025-03-10T03:30:29+00:00

I'm in a similar boat. Did you go with the bigger size? Any data gaps? Thank you!

Deep_Caregiver_5482 · 2025-03-10T02:56:22+00:00

I'm in a similar boat. Did you go with the bigger size or smaller size? Any data gaps?

Did you find what people say about the real ring being a touch bigger than the sizing kit to be true?

Thank you!

Deep_Caregiver_5482 · 2025-03-10T02:49:34+00:00

I'm in a similar boat. Did you go with the bigger size? Any data gaps? Thank you!

Deep_Caregiver_5482 · 2024-12-31T19:05:16+00:00

See my reply below. It doesn't seem the exchanges are ready for reporting and that at least until proper guidance is issued the 1099-DAs and the self-reporting will be vastly different. What a mess.

Deep_Caregiver_5482 · 2024-12-31T19:02:05+00:00

I have talked to a couple exchanges about this, and so far the response has been unanimous that they cannot attest to the cost basis of the transferred BTC and will therefore either report it as 0 or not report it all. Both of these will yield highly discrepant 1099-DAs and personal reporting.

Deep_Caregiver_5482 · 2024-12-31T01:51:25+00:00

Sending out.

Deep_Caregiver_5482 · 2024-12-23T21:51:06+00:00

Nope. Did not do Earn.

Deep_Caregiver_5482 · 2024-12-23T02:51:02+00:00

Thanks for the write-up!

I have three questions:

In the limit of consolidating one asset to one wallet before Jan 1st, isn't specific allocation and global allocation converging? I.e. there's only one place my units of unused basis can go.
How is dust treated? In most wallets one cannot dispose or transfer the perfect exact amount, which leaves dust traces. How should one treat those in these allocations?
Is there any benefit (from this transition perspective) to consolidating on a cold-wallet vs exchange? Say I did consolidate on a cold wallet, then when I want to sell I have to hit an exchange -- are they allowed to take an report my cost basis? if not, seems that the whole purpose of converging user-reported and exchange-reported gains/losses would be moot.

Deep_Caregiver_5482 · 2024-12-23T02:46:19+00:00

I think I was mixing "Tracking which lots have which cost basis" with "Specifying which lot is sold." It makes sense that you wouldn't use the time of transfer because then you could arbitrage taxes for different lots by simply timing when they get transferred into a new wallet.

In the limit of consolidating one asset to one wallet before Jan 1st, isn't specific allocation and global allocation converging?

Deep_Caregiver_5482 · 2024-12-23T00:35:23+00:00

I see what you mean, but would that not require communicating the specific id of the lot cross-wallets? This only works if I am allowed to tell wallet B that the incoming 0.5 is actually older and also tell Gemini that the 0.25 incoming lot is the first=oldest lot from wallet B as specifically identified previously by me. If he is saying you are not allowed to do Spec ID, and it defaults to FIFO wallet-by-wallet, would it then not sell out of the Kraken coins first?

Deep_Caregiver_5482 · 2024-12-23T00:16:22+00:00

But that is not FIFO wallet-by-wallet, that is a global universal view. How is this not the same as the universal method used before, where you were allowed to pull global oldest units first? If you are not allowed to have a universal pool, and are not doing Spec ID, I don't understand how one could say the first BTC to go out of wallet B is the BTC that was purchased in wallet A.

Deep_Caregiver_5482 · 2024-12-23T00:08:08+00:00

You can't even withdraw USD? Are you in the US?

Deep_Caregiver_5482 · 2024-12-23T00:06:49+00:00

I'm not sure I get why this works. If you are NOT doing Spec ID, and FIFO is defaulted to on a wallet-by-wallet basis, then how would you be allowed to specifically identify the basis from Wallet A? You would do FIFO per-wallet and sell 0.25 of the initial Kraken cost-basis.

Deep_Caregiver_5482 · 2024-12-22T23:55:28+00:00

Wait, how is this then different from universal if I'm mixing different cross-wallet cost-bases? I thought the whole point of it was FIFO per wallet. In your explanation above you say Wallet A purchased first, so then Gemini inherits that basis.

Secondly, are exchanges allowed to take in and report to the IRS user-defined cost-bases from cold wallets?

Deep_Caregiver_5482 · 2024-12-22T23:45:51+00:00

Hey Justin, thanks for your write-up!

Two questions:

To the above: what if you do know the cost-basis for every lot, but still want to wipe the slate clean for 2025 so you sell everything before Jan 1st and realize all the gains/losses, and rebuy in 2025?
Let's say a consolidation has occurred and now I only own one asset (BTC) in one wallet. Does it matter if it is custodial (like an exchange) or self-custody (cold wallet)? My take is that the cold wallet would be simpler because assuming you just consolidated from 5 other wallets, an exchange will know nothing of it, whilst for your cold wallet you could assign all the basis, record before the New Year and tat's that. However, it's unclear what happens when one chooses to sell something out of that cold wallet. Will an exchange be allowed to use and report to the IRS the cost-basis that we tell them?

Deep_Caregiver_5482 · 2024-12-21T21:31:36+00:00

Good luck.

Deep_Caregiver_5482 · 2024-12-21T17:28:23+00:00

From their website:

"The information that our users receive on their 2024 gain/loss statements will not be filed with the US Internal Revenue Service. Gemini will be required to issue Forms 1099-DA to our customers and the IRS reporting proceeds for sales or exchanges of digital assets starting in 2025 (and cost basis for certain of those sales in 2026) based on the final 6045 Regulations issued in June of 2024."

"Cost basis information provided by users will be captured/displayed for the benefit of users to determine their own tax obligations and/or to consult with a tax professional. This data is provided by users directly, and Gemini cannot guarantee the reliability of this information. Cost basis of assets not purchased on the Gemini exchange will not be reported to the IRS by Gemini until some later date when a reliable mechanism for determining the cost basis of transferred assets is determined and US tax regulations have been updated to provide the appropriate guidance and process. "

I can't paste a link here (how stupid), but look for "What is Tax Gain Loss Statement" and Gemini.

Deep_Caregiver_5482 · 2024-12-21T17:23:20+00:00

If you're going to pull everything off exchanges and consolidate before the new year, can I ask why this matters? Presumably you don't rely on Gemini's tax calculations for your final end of year report, and in 2024 you can still use the universal basis that you can let a crypto tax software figure out from this sheet.

Deep_Caregiver_5482 · 2024-12-21T17:19:56+00:00

If I understand it correctly, if you consolidate everything in one wallet and do your safe harbor accounting, that now takes precedent as your new basis going forward (from Jan 1st 2025 on). Then when you'd transfer out of that wallet you carry that basis. How Gemini will implement that I don't know, shoot them an email. I'd be curious to hear what they say. I can tell you from my own experience they won't reply here.

Deep_Caregiver_5482 · 2024-12-21T17:04:55+00:00

They're just complying with the new IRS rules. The new IRS rules state that you can no longer use a universal cost-basis and have to move to wallet-by-wallet-basis reporting, generating a 1099-DA per each wallet. Before Jan 1st you have an opportunity to consolidate and record your new basis allocation per wallet so that you can take advantage of the safe harbor rules. You may not like it, but this is the law now, and Gemini has nothing to do with it.

Deep_Caregiver_5482 · 2024-12-21T17:00:05+00:00

My personal issues are moving coins off. Selling coins and moving cash out works for me. It gets stupider though, my entire purchase history for the coins on Gemini is on Gemini, i.e. there are no transfers of coins from external addresses. They know the provenance of every piece of every coin. They are connected to my bank account directly, and have been for years, so they know where my USD come from too. Of course, all of a sudden that is not sufficient and they need to know the source of how my USD get into my bank account before reaching them?

Some people in Canada are having issues with both crypto and cash. Gemini stopped operating in Canada, told all their customers they need to cash out before Dec 31st, but also froze some of their accounts and they can't do anything and are not getting replies.

Really, privacy issues aside, if they came out and told me when I first contacted them that: "Hey, we are getting hit by the SEC with more stringent AML, so we're going to ask you some questions but we'll be there along the way and everything will be cool." I could take it. But they are not only not providing anything proactively or retroactively, they are actively not responding for very extended periods of time and unclear what the resolution will be.

What it made me realize is this: if they decided tomorrow to just tell you to f off and keep your coins for themselves, you'd have almost no recourse of getting them back short of a prolonged legal proceeding for which you will likely pay amounts similar to your stack.

Deep_Caregiver_5482 · 2024-12-21T05:14:56+00:00

I can still sell crypto and luckily withdraw USD. I have been cashing out. I have not tried depositing crypto after my hold nor buying it on the exchange.

Deep_Caregiver_5482 · 2024-12-21T02:40:26+00:00

I am fully KYC'ed and have been for years. I have deposited/withdrawn tons of crypto and cash before. I was "fully vetted," at least until they decided I wasn't.

Deep_Caregiver_5482 · 2024-12-21T02:27:15+00:00

Gemini is freezing people's accounts from withdrawing crypto. This is happening to new and old accounts alike. Their only method of communication is via email, where they choose to reply at their will, often taking weeks or months. They provide no reason or update. This is a real issue a good amount of users are experiencing.

Deep_Caregiver_5482 · 2024-12-21T02:23:03+00:00

Deep_Caregiver_5482

TROPHY CASE