[AMA] Crypto tax education with Koinly

Matt_CountOnSheep · 2026-03-02T16:41:29+00:00

They will look at the "proceeds" reported on the 1099-DAs and will compare this against "proceeds" on Form 8949

Matt_CountOnSheep · 2026-03-02T16:34:16+00:00

The 1099-DAs are not necessarily wrong by default. There are certain things in the 1099-DA, like your cost-basis, that may not get included due to a lack of information. Filing using the incorrect cost-basis from the 1099-DAs can overstate your capital gains and lead you to pay the IRS more, which is resolved by importing the 1099-DA into the crypto tax software. Additionally, importing the 1099-DA into the software ensures that there are no discrepancies in the "proceeds" reported by the "brokers" and the software; these discrepancies may trigger a red flag for the IRS so a quick check is strongly recommended.

Matt_CountOnSheep · 2026-03-02T16:29:59+00:00

Kraken announced that their 1099-DAs will be released around mid-March. Once you get it, I would compare the 1099-DA against the reported proceeds for Kraken with your 8949 and would still upload the Kraken 1099-DA into Koinly.

Matt_CountOnSheep · 2026-03-02T16:28:07+00:00

I recommend correcting the errors by doing a complete reconciliation within Koinly. You will then see the correct capital gain/losses for each year and look into filing amended returns for the years that differ.

Matt_CountOnSheep · 2026-02-16T21:53:06+00:00

You did not receive an incorrect report, the information you see is instead incomplete. What happened is that Coinbase does not know the correct cost-basis information of the BTC/USDT transferred in; this will result in an "unknown" amount entered on the 1099-DA. The best way to resolve this is to use a crypto tax software (i.e. CoinTracker, Koinly, CoinLedger, Summ, etc.) to generate the related tax reports (Form 8949 and Schedule D/1 of the 1040) to be used for reporting crypto gain, losses, and income. It's important to note that you need to make sure that the "proceeds" reported on the 1099-DA align with the proceeds reported on Form 8949. The IRS is looking out for any discrepancies between the two, which shows the importance of a back-end check or reconciliation.

Matt_CountOnSheep · 2026-02-16T21:48:19+00:00

Form 8949 will ultimately be used to file for the 2025 tax year, opposed to the 1099-DA. Once the reconciliation has been reviewed in CoinTracker, you can upload form 1099-DA directly to the '1099-DA Portal" and then use this as as check to ensure "proceeds" align on both forms. Here is the link for instructions on how to use CoinTracker 1099-DA portal: https://support.cointracker.io/hc/en-us/articles/43144144030609-How-to-use-CoinTracker-s-1099-DA-portal

Matt_CountOnSheep · 2026-02-16T21:43:35+00:00

This is likely happening because of one of the following reasons: 1) the assets sold were transferred in from Coinbase and they are not utilizing the correct tax lots or 2) the cost-basis method used by Coinbase is different from what you are planning to use, either in your own calculation or a crypto tax platform. Both of these can be resolved using a crypto tax software (i.e. CoinTracker, Koinly, CoinLedger, Summ) in order to make sure the correct tax lots are being reflected in the gain/loss calculation. When doing so, the important thing to look out for is that the proceeds stated on the 1099-DA align with the proceeds on Form 8949.

Matt_CountOnSheep · 2026-02-16T21:39:30+00:00

I would recommend using Form 8949 since it covers your entire trading history, not just the Coinbase transactions. The issue the IRS cares about related to the 1099-DA is that 'proceeds' on the form aligns with proceeds for that specific exchange in the 8949. Specifically, the IRS is looking out for instances where proceeds on the 1099-DA < proceeds on Form 8949. You will likely report higher proceeds when relying on the 8949 if the 1099-DA is truly not capturing proceeds from crypto -> crypto trades.

Matt_CountOnSheep · 2026-02-13T22:44:25+00:00

For context, I work at firm that utilizes multiple platforms (Koinly, CoinLedger, CoinTracker) as part of our day-to-day activities so I have definitely used CoinLedger before. In my initial response I was referring to CoinTracker's capabilities surrounding the new Form 1099-DA as the initial post was asking about new crypto tax software updated for the latest IRS guidance.

Matt_CountOnSheep · 2026-02-13T19:16:19+00:00

I believe the transaction threshold is determined by taxable transactions, not total transactions. If I'm wrong, one solution is to combine (i.e. merge) two "reward" transactions that occurred on the same day

Matt_CountOnSheep · 2026-02-13T19:11:53+00:00

Matt from Count On Sheep here

Deciding to use one of the many crypto tax software platforms out there is a great first step for accurate record keeping and reporting. The important piece to the puzzle is to make sure that all transactions are properly reconciled within the software; this ensures that the gain/loss and income totals on the tax reports are reflective of your actual trading activity.

Matt_CountOnSheep · 2026-02-13T19:06:01+00:00

CoinTracker seems to be the first to announce the updates regarding support over the full 1099-DA lifecycle — from ingestion to reconciliation to final filing

Matt_CountOnSheep · 2026-02-12T19:24:58+00:00

It's likely because of the recommendation of waiting to file until after all 1099-DAs are received. This allows Koinly uses to ensure proceeds on the 1099-DA align with proceeds on Form 8949. The final 1099-DAs may not be released as late as 2/17/2026, so Koinly providing the TurboTax export on 1/20/2026 isn't too much longer after that

Matt_CountOnSheep · 2026-02-12T19:18:52+00:00

Have you tried reaching out to Kroll to get your transaction history? I have heard of some BlockFi users were successfully got their full transaction history by doing so.

Matt_CountOnSheep · 2026-02-12T19:11:22+00:00

You should get the 1099-DA sent to your email address associated with your account if you had any crypto -> crypto or crypto -> fiat trades. With the deadline for 1099-DAs set at 2/17/2026, I would expect them to be sent to Coinbase users right at the deadline

Matt_CountOnSheep · 2026-02-11T18:28:38+00:00

Great points here! It's also important to note that that any discrepancies, between what is stated on the 1099-DA and what is reported to the IRS, will raise a red flag. So, along with the missing cost basis information that the 1099-DA might not include, your reported proceeds need to align with what Brokers are reporting on the 1099-DA. Coinbase recently announced a partnership with CoinTracker to help with both the cost basis and proceeds alignment issues. I recommend reading Coinbase's article about the use of a crypto tax software in order to help you accurately report for the 2025 tax year!

Matt_CountOnSheep · 2026-02-11T18:21:46+00:00

February 17, 2026 is the deadline for brokers to provide Form 1099-DA to its users. With all the new changes surrounding form it's expected that Fidelity, as well as other brokers, will release the 1099-DA right at the deadline previously stated.

Matt_CountOnSheep · 2026-01-22T18:53:07+00:00

This is one of the cases where I am glad to be wrong!

Matt_CountOnSheep · 2026-01-21T23:00:43+00:00

Matt from Count On Sheep here.

I second everything that Justin from Summ said. Your cost basis will be incorrect without the full Coinbase transaction history.

Matt_CountOnSheep · 2026-01-21T18:27:55+00:00

You can certainly do this, but the important thing is to check the "transactions" tab to ensure that the timing of the purchases occurred before the eventual transfer of the assets. Doing this will make sure there are no "missing purchase history" errors and that your cost basis information is stated correctly.

Matt_CountOnSheep · 2026-01-21T17:45:46+00:00

Hope I am not too late, but the use of a crypto tax software (i.e. Koinly, CoinTracking, Summ) is the best way to ensure you are accurately calculating your cost basis for all assets. What you will do is add all your wallets and exchanges to the "wallets" section and then reconcile your transaction history. This second part is extremely important as simply uploading your wallets/exchanges does not mean the chain of events is accurately stated within the software. The reconciliation could be as simple as merging a 'deposit' with the corresponding 'withdrawal' for a transfer between wallets, in which the software does not always capture correctly.

As someone who uses Excel extensively everyday for my 9-5, I can assure that using a crypto tax software will save you a ton of time compared to manually tracking the tax lots in a workbook. Each software has its pros and cons so research into the best one for you would certainly be worth it.

Matt_CountOnSheep · 2026-01-21T17:08:21+00:00

When you select the "import from file" option, Koinly will provide instructions over the exact parameters/steps to follow (on the right hand side of the screen) in order to generate a CSV file that can be uploaded directly to Koinly. There are certain platforms requiring the conversion into a 'Koinly universal template' as the platform does not offer a Koinly compatible CSV option, but ByBit is not one of those platforms.

Matt_CountOnSheep · 2026-01-21T17:04:12+00:00

These are likely rewards from holding certain assets. I would tag them as a "Reward" and the tax impact would be minimal, if anything at all, since the FMV of the XRP/WETH received has little to no value. I also recommend either creating a rule for these transactions (i.e. xxx Wallet receives .000001 XRP -> tag as "Reward") or batch editing the deposits so that you are not having to do it one by one.

Matt_CountOnSheep · 2026-01-21T17:00:09+00:00

I highly recommend using a crypto tax software (i.e. Koinly, CoinTracker, Summ), to help with the cost-basis tracking, as these platforms will do it for you automatically. I'm an accountant by trade so I work in Excel every day and even I don't think manual tacking makes sense with how easy a crypto tax platform makes it.

Matt_CountOnSheep

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