Note: Missing Purchase History used to be referred to as Negative Balance warnings.
Dealing with "missing purchase history" might sound daunting at first, especially if you're unfamiliar with accounting concepts. But don't worry—once you understand why it happens, it’s easier to resolve than it seems. Crypto Tax Calculator (CTC) is designed with a streamlined process to help you tackle this issue step by step, ensuring your tax reports remain accurate and reliable.
When selling or disposing of an asset, CTC tracks its purchase history (cost base) to calculate the gains. A Missing Purchase History warning occurs when the ‘purchase’ transaction is missing. Without a trackable purchase history, CTC assumes the asset was acquired at zero cost, potentially resulting in inaccurate gains. This guide explains how to resolve it.
Note: Although there may be an initial purchase history, the cost base might not be tracked accurately due to incorrect reconciliation or a misunderstanding of accounting concepts.
General Transaction Flow Overview
Every asset you dispose of should generally follow the transaction flow outlined below.
Action | Description | Example Categories |
1. Acquisition | Transactions like buys, gifts, staking rewards, income, etc representing an increase to your overall balance. | Buy, Mint, Gift, Income, Airdrop, Staking Reward, Loan, etc. |
2. Moving Assets (optional) | Moving assets between your wallets or exchanges. | Transfer and Bridge |
3. Disposal | Transactions like sales, fees, or expenses representing a decrease to your overall balance. | Sell, Outgoing Gift, Expense, Fee, Lost, Loan Repayment, etc. |
Note: The categories listed above are provided for demonstration purposes only. The relevance and implications of each category depend on your individual circumstances and tax settings.
A Missing Purchase History occurs when you have a disposal transaction but lack the corresponding acquisition transaction, or when the cost base is not carried over when moving the asset.
Common Reasons for a Missing Purchase History
Here are some of the common reasons why you get a missing purchase history:
Reason | Explanation |
Misinterpreting stablecoins as fiat currency | Stablecoins like USDC and USDT are pegged to the USD but remain classified as crypto assets in most countries. Ensure that you have recorded the acquisition transaction for these stablecoins. |
Missing Data | Data completion is crucial. Here are some recommended items to check:
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This could result to the cost basis of uncategorized transactions not taken into account.
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Incorrectly Categorized Transactions | For example, miscategorizing an ‘Airdrop’ (an acquisition) as ‘Receive’ (a transfer between your own accounts) can lead to a missing purchase history. |
‘Send’ and ‘Receive’ transactions must group into a ‘Transfer’ to properly transfer the cost basis. This is especially crucial if you are using Cost Basis by Wallet and Exchange. Learn more here. |
Steps to Resolve Missing Purchase History Warnings
Step 1: Import all of your exchanges and wallets
Missing data can lead to inaccurate balances, cost bases, and calculated gains. Ensure you import every exchange and wallet you’ve used, including the old ones with no remaining assets.
If your exchange/wallet is not supported, use the Advanced Custom CSV Import or manually add transactions using the ‘Add Transaction’ button on the Transactions page.
Tip: Check the Additional Notes section of the Integration you are importing. Ensure that you also import any possible missing data mentioned as a limitation.
Learn more:
Step 2: Correctly categorized your transactions
Incorrect and uncategorized transactions may cause missing purchase history issues. Ensure that you use the proper categories for your transactions. The Transaction Categories guide lists the categories and steps for identifying uncategorized transactions.
Learn more:
Step 3: Check whether all ‘Send’ and ‘Receive’ transactions have grouped into a ‘Transfer’
Every ‘Send’ transaction should pair with a corresponding ‘Receive’ transaction. These pairs must be grouped into a ‘Transfer’. This is crucial if you use or plan to use the ‘Cost Basis Tracking By Wallet and Exchange’. This rule also applies to bridge transactions. Read the Send, Receive, and Transfer guide for an in-depth explanation.
Tip: Only use the ‘Send’ and ‘Receive’ categories when transferring funds between your own exchanges/wallets.
Additional Tips for Resolving Missing Purchase History
Follow the tips below If you’ve completed steps 1 to 3 and still have a missing purchase history.
Tips | Explanation |
Review and reconcile all remaining warnings on the ‘Transactions’ or ‘Review’ page. | Check this guide for more information about reconciliation. |
Check the CSV import date | If you imported via CSV, you can see the date of the first and last transactions imported for every CSV. That’s a hint as to whether your imported CSVs include all the years you have used that exchange/wallet. It can also identify any possible duplicate data. |
Tracking back your balances | Use the ‘Ledger’ or ‘Show balances’ feature to track the running balances. A missing purchase history is most often related to negative balances. Hence, tracking back your balances can help you figure out where the issue started. |
Missing Purchase History Example
Let’s walk through a simple scenario where an incorrect categorization of a ‘Buy’ transaction leads to a missing purchase history and how it impacts your gains.
Example:
Date | Action | Details |
Jan 1, 2022 | Buy | 1 BTC for $60,000 in Binance |
Jan 1, 2022 | Transfer (Send and Receive) | 1 BTC from Binance to Coinbase |
Jan 1, 2023 | Sell | 1 BTC for $70,000 in Coinbase |
The correct gains for this sample scenario is $10,000.
Scenario of Incorrect Categorization
You imported both your Binance and Coinbase data. However, you incorrectly categorized the purchase of 1 BTC as ‘Receive’ instead of ‘Buy’.
The yellow dot indicates a missing purchase history. Because of the missing purchase history, CTC assumes a ‘zero-cost buy’ on the sale of BTC. Hence, the calculated gains are $70,000 instead of only $10,000.
How Correctly Categorizing Transactions Resolve the Missing Purchase
After correctly categorizing the initial 1 BTC as ‘Buy’, the gains are calculated correctly.
By correctly categorizing the initial purchase as a ‘Buy’, CTC can track the correct cost base, and the missing purchase history issue is resolved.
If you have any questions or need help, we're here for you! Feel free to reach out to us via the in-app chat in the bottom-right corner or send your inquiries to [email protected].