I. $20K in Purchases reported to IRS
I have purchased Bitcoin (BTC) on Cashapp in 2021, 2022, 2023 and 2024. Cashapp reports these purchases to the IRS. The total amount purchased over this time is about $20,000 worth.
I have the basis for everything from Cashapp, which provides the date, purchases, amounts, etc.
I never once sold BTC on Cashapp -- it was transferred out.
II. $18K in complete loss not reported to the IRS
HOWEVER, I was quite a degenerate then, having got into margin trading in which I swung massive gains and losses. Ultimately, I lost all but 2K work of my BTC.
The way I lost it was by transferring the BTC to other exchanges that do not report to the IRS*.*
III. The problem
The IRS sees that I own and still have $20k worth of BTC, but at different times over the years I have sold/lost BTC for a substantial loss.
I do not have selling dates, prices or anything of the sort on these trades. The trades occurred on 10+ different exchanges and there are thousands of transactions.
What I do have now is my cost basis and what I am left with: about 0.047 BTC (~$2,000 worth). I did not cash out BTC to dollars - the BTC I no longer have is a result of a complete loss. It's quite embarrassing to lose this much, but I have learned my lesson and life goes on.
IV. How do I go about being honest and reporting this?
My goal now is to report this to get it off my chest. I want to be honest and practical about my situation. These are substantial losses at 100% given the margin trading. While tax would 100% be do on each of my thousands of training gains, I did not make any net money -- I'm down quite a substantial amount.
I clearly lost way more than I currently own. It would be impractical to go and attempt to track my enormous amount of trades now.
Any suggestions on how to report this?
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