First Inflow Missing Basis warnings occur when CoinLedger detects that you have deposited or transferred crypto into your wallet, but you haven't shown us how you originally purchased or acquired it. When the original acquisition for the asset has not been imported, there is no way for CoinLedger to calculate what your cost basis is for that asset. Therefore, it is flagged with a Inflow Missing Basis warning.

If you are missing cost basis for an asset in your CoinLedger account and your first imported transaction for that asset is a Deposit or Uncategorized transaction, it will be flagged for a First Inflow Missing Basis.

Let's run through an example to better illustrate how First Inflow Missing Basis Warnings occur:

In this case, you haven't imported the original BUY transaction of your MIM tokens, and thus, CoinLedger does not know your cost basis for MIM.

If you import only your Arbitrum wallet into CoinLedger, the deposits of MIM tokens from Kucoin will be flagged with First Inflow Missing Basis Warnings (pictured below).

In the picture below, the first detected transaction for MIM is an inflow—a Deposit. However, there are no other prior BUY, TRADE, or INCOME transactions to set the cost basis for these tokens and to show how the MIM was originally acquired.

There are two ways to show CoinLedger how the asset was originally acquired:

There are some scenarios when CoinLedger does not automatically classify a transaction when it is imported. Such transactions need to be classified further in order to properly assign cost basis.

Here are some situations where you will need to do this:

If a flagged Deposit transaction is actually an instance of you receiving crypto income (like income from staking, interest, mining, airdrops, etc.), you can reclassify it by selecting the three dots next to the transaction and clicking Change Classification. From there, you can select the appropriate transaction type and then select Save.

In some cases exchanges do not export complete data for fiat buys (purchasing crypto with fiat currency) so the transaction gets imported as a Deposit into CoinLedger. To resolve this, you can reclassify the Deposit transaction into a Buy. Learn more about that process here.

If you transacted with DeFi protocols that CoinLedger does not yet natively support, some trade transaction types will need to be classified further in order to be included in report calculations. For tax purposes, Trades include all scenarios where you swapped one or more crypto tokens for another digital asset.

If your wallet transacted with a smart contract or decentralized app that we don’t have a native integration with yet, the transaction will be classified as Uncategorized in CoinLedger. Uncategorized transactions may also appear when you import a transaction type that CoinLedger doesn't automatically recognize. They are excluded from your report calculations, which can lead to missing cost basis warnings. Learn how to classify Uncategorized Transactions here.

CoinLedger needs access to all your historical data in order to calculate your gains and losses. The software cannot generate accurate calculations based on inaccurate or incomplete data. Follow these steps to review your imported data and ensure that all original fiat buys, trades, and crypto income transactions have been imported completely into CoinLedger.

To import from an exchange, wallet or blockchain, go to the Import page, select Add Account, choose your platform, and follow the step-by-step instructions on your screen to complete your import.

If you don't know which platform to import, CoinLedger can help. In some instances, CoinLedger will flag the source (i.e. crypto exchange or wallet) where a deposit was sent from. In this example below, I have a First Inflow Missing Basis warning for ETH in my MetaMask. When I click on the transaction and expand it further, I can see that this ETH was originally sent from my Coinbase account. This means that I can resolve my Inflow Missing Basis warning by simply importing my Coinbase transactions.

If you transacted on an exchange or blockchain that we do not currently support you can import the data using our Universal Manual Import Template or you can add single transactions in-app.

Yes.

CoinLedger will still run your tax report in spite of missing cost basis data. In many circumstances, First Inflow Missing Basis warnings will not have any significant effect on your gains and losses, particularly if you are simply holding the asset and do not sell or trade it away. This is because there is no gain or loss to report until you dispose of the asset by selling or trading it away.

However, if you later dispose of the asset without entering the original acquisition, it's possible that your report could be impacted. Our platform treats missing data with a zero cost basis, which is the most conservative approach but can inflate your gains if left unresolved. Learn how how missing cost basis data will effect your tax report in this article here.

Have any questions? Our support team would be happy to help :)