TaxBit offers a unique API integration with BlockFi that isn’t found anywhere else! This means that the BlockFi API may behave differently than API connections with other platforms.
In this article:
- What is Cost Basis?
- What is Missing Cost Basis?
- Reporting BlockFi mining income
- How do I fix Missing Cost Basis from BlockFi?
What is Cost Basis?
In short, cost basis refers to an asset's value at the time it is acquired. Keep in mind that this is different from the asset's current market value, and in order to assign cost basis to a particular asset, it's important to make sure that the acquisition data has all been recorded on your TaxBit account.
Before we go any further, please make sure that you have connected all of your exchanges, wallets, and any sources you've used other than BlockFi. It's crucial to get all of your crypto transactions across all sources and all time before you start to look too far into any missing cost basis flags (covered more in the next section).
Adding all your sources will typically resolve those flags without you needing to do any additional work. In other words, don't worry about troubleshooting any cost basis related flags until you know you've uploaded all your transactional data!
To learn more about what cost basis is, check out this great guide HERE!
What is Missing Cost Basis?
You may notice that your BlockFi tax center shows you are missing cost basis. Missing cost basis simply means that the original acquisition of an asset has not been recorded on your TaxBit account. You can learn more about missing cost basis HERE.
Typically, the transactions from BlockFi that will cause missing cost basis are Transfer In transactions. These Transfer Ins mean that there may be assets on your BlockFi account that were acquired on another platform or had been transferred off of BlockFi and then back onto it.
Many of these Transfer Ins may also be from mining that's taken place outside of BlockFi. How to record mining income on BlockFi will be covered in the next section.
You can use your TaxBit account to help fill in missing data that will complete the story and provide the needed context to identify the cost basis of your assets.
Missing cost basis can be resolved by getting your transaction history up to date so that TaxBit has a full accounting of all of your acquisitions, disposals, and transfers between accounts. This can include adding API integrations for your exchanges that are not yet connected to TaxBit, submitting CSV's for exchanges that don't offer an integration, or even manually adding transactions for sources that don't offer one of the previous two options.
How do I fix Missing Cost Basis from BlockFi?
You can check out this guide HERE on adding cost basis, and if you find you need to manually add the transactions, here’s how you’ll do it:
- Manually add the income transaction first on the mining platform where you earned it. Be sure that the time stamp for the income is at least two minutes before the “Transfer In” on BlockFi.
- Next, add the “Transfer Out” transaction at least one minute before the “Transfer In”. As long as both transfer transactions have the same asset type and a similar asset quantity, those two transactions will match up and tell the system where the asset came from and how it was originally acquired.
In short, you’ll end up with a total of three transactions: the “Income” transaction from the mining platform; a “Transfer Out” from the mining platform; and the “Transfer In” on BlockFi. This should ultimately resolve the missing cost basis issues appearing in your account!
Reporting BlockFi mining income
Some users opt to deposit mining income directly into their exchange wallets instead of first storing them in a separate wallet and then transferring it to an exchange. If you have mining income on BlockFi, you’ll see a “Transfer In” transaction on BlockFi recorded on your TaxBit account.
This is because the income was earned on a separate platform and then transferred over to your BlockFi account. If you have missing cost basis on your BlockFi account from mining income, then you’ll simply need to add the cost basis by recording the acquisition on the mining platform and the “Transfer Out” from that platform.
Still have questions? Send us an email at support@taxbit.com or chat with us using our live chat feature, and we'd be happy to help!
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Comments
1 comment
Hello,
BlockFi.com locked my account with $25,000 inside, around 80 days ago, and they are not willing to process a refund. They are asking for a court order just for them to process a refund.
After seeing a bunch of info about the products BlockFi offers that seemed attractive at first glance, I decided to open an account. Within minutes the account was ready to take the money out from my bank. No photo identification required, by the way.
I started depositing money, and seemed easy compared to other services of this kind.
After a while, I thought it would be a good idea to secure some funds by processing two Crypto withdrawal requests.
I've been waiting for two days (the minimum waiting time offered for a Crypto withdrawal), but instead of processing my requests they asked me for verification via ID/Passport, photos/video using my phone..(a regular request of any CEX), but what's strange, it's that they will ask for Verification after they allow you to deposit large amounts of money, and not before, as any other service does. I wonder what would happen with your money in a strange scenario where (for some reason) you can't successfully pass the Verification.
But... that was Ok. I successfully processed the verification within minutes.
Then, surprise..... Because I had two pending withdrawal requests for two different Crypto coins, even if one of them was for a very small amount being executed just for me to understand their withdrawal process, BlockFi asked me to get Verified once again. Not a different Verification process. Just the same one I had successfully executed minutes ago.
No problem! I did it again "You're all set !".
Within minutes, I got an email notifying that my BlockFi account was locked. No explanation other than asking to read their TOS, and the following notice..... "Should you be unable to retrieve funds through your bank, you must wait 60 days from receipt of this email before requesting a manual wire withdrawal to the source bank account. Please note that we may require identity verification to process the withdrawal. Note: Any requests made to BlockFi about your account funds will be ignored until we can process a return of funds which will only be eligible after 60 days. Do not reach out to BlockFi until after this date. "
The 60 days have passed and even though I used every possible method to contact BlockFi, it doesn't seem like anyone's going to reply. (Several support tickets or by sending any kind of message using any possible form on their Help/Support pages, trying to call them using the phone number listed over their Help page, sending message via some of the previous support tickets that were used around two months ago to communicate with them..and more..
Let's not forget that a considerable amount of money is still with BlockFi, and my account is still blocked.
If that can't be called an extremely frustrating situation, I'm curious to hear another :) .
--------- UPDATE
Finally I've been contacted, being informed that they will return my money...soon.
This is definitely good news, but ... I still find myself in a "strange" situation.
Let me explain: When BlockFi locked my account they said: "At this time, we are not able to return any funds to you directly. We’d recommend that you contact your bank and request that any ACH transfers you made to your BlockFi account be canceled and reversed. Should you be unable to retrieve funds through your bank, you must wait 60 days from receipt of this email before requesting a manual wire withdrawal to the source bank account. "
I thought it would be faster to follow BlockFi's advice by asking the bank to proceed as per their instructions,but a nightmare was about to start.
Shortly after asking the bank to return transfers made by me (no scam or hack involved), they decided that something is not right, ending by closing my bank accounts. PERMANENTLY.
So BlockFi will not be able to send a Wire Transfer as it will be automatically returned.
But when they blocked my account, part of the money was in Crypto balances. I wonder what are the terms used to close my positions. Crypto coins rates have changed in the past 70 days. Maybe they will process my original withdrawal requests via crypto? Or will they accept my request to send my money to another bank account in my name? Also I wonder how they could have sent a Wire Transfer to an account that does not accept wires (if they were sent to BlockFi from a NeoBank). Not the case here, but just wonder...
--- UPDATE
BlockFi's final word is: "Any funds on the account will remain locked until BlockFi receives a court order to refund the funds"
$25,000 of my money are locked and they also refuse a refund to the source bank account
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