Overview

When assets are deposited from an external source, Anchorage may not have the original acquisition details. If cost basis isn't provided, the system defaults to $0, which may affect your reported gains/losses. This information ensures that tax lots and gains/loss calculations reflect accurate historical cost basis.

Cost basis information you provide may impact data reported on 1099-DA, for eligible US tax-paying entities. Anchorage Digital partners with Taxbit to support tax reporting, including 1099-DA, 1099-MISC, and 1099-INT.

Note: Anchorage Digital does not provide financial, tax, or legal advice. Consult a qualified professional for guidance specific to your situation.

Cost basis method (HIFO)

Anchorage Digital uses HIFO (Highest-In, First-Out) by default for cost basis accounting unless otherwise configured.

Example (HIFO):

• Purchase 1: 10 BTC at $20k/BTC
• Purchase 2: 20 BTC at $22k/BTC
• Purchase 3: 15 BTC at $35k/BTC

If 25 BTC are sold:

• 15 BTC from Purchase 3 are assumed sold first (highest cost)
• Remaining 10 BTC from Purchase 2

Anchorage Digital will leverage the “highest-in, first-out” (HIFO) accounting method unless otherwise specified by the client. Taxbit offers HIFO, LIFO and FIFO. Contact Anchorage customer service to request a change in default cost basis methodology. Individual lot selection isn't currently available.

Default logic and validations

• If a deposit is missing user-provided cost basis, the system assigns a default cost basis of 0. This means gains/losses could be incorrect. Provide cost basis information promptly after deposits are completed to avoid inaccurate reporting.
• Cost basis updates support up to 100 lots per transaction.
• The acquisition date must be on or before the transfer/deposit date (the API enforces this).
• Trades may have small rounding differences due to settlement precision. Your internal reconciliation should account for this.

API workflow for user-provided cost basis

The typical flow is:

1. List your tax accounts.
2. List deposit transactions for a tax account.
3. Identify deposits that are missing cost basis.
4. Submit cost basis + acquisition dates (one request per deposit transaction).

1) List tax accounts

Use this endpoint to identify tax accounts your API credentials can access.

• GET /tax/accounts

Response (example):

{
  "accounts": [
    {
      "taxAccountId": "acc_123",
      "name": "Example 123"
    }
  ]
}

2) List deposit transactions for a tax account

Use this endpoint to retrieve deposit transactions for a given tax account.

• GET /tax/accounts/{taxAccountId}/transactions

Recommended client-side filters:

• hasCostBasis = false, where giving a false value will return deposits that are missing user-provided cost basis

Response (example):

{
  "data": [
    {
      "assetType": "BTC",
      "externalId": "9be748be-d760-4d36-90f8-86b699c4e8bd",
      "id": "9cd9f4d4-078b-4e44-a308-7662fec0f546",
      "receivedAssets": [
        {
          "acquisitionDatetime": "2026-04-06T17:55:48.083Z",
          "costBasis": "2500",
          "quantity": "1.0"
        }
      ],
      "transactionTime": "2022-07-30T22:15:31.99999Z"
    }
  ],
  "page": {
    "next": "<next page url>"
  }
}

3) Provide cost basis for a deposit transaction

When you identify a deposit missing cost basis, update it by submitting one or more lots whose total quantity matches the deposit quantity.

• PATCH /tax/accounts/{taxAccountId}/transactions/{transactionId}

Request (example):

{
  "lots": [
    {
      "quantity": "0.7500",
      "costBasis": "15000.00",
      "acquisitionDate": "2024-05-10T14:19:52.539Z"
    },
    {
      "quantity": "0.5000",
      "costBasis": "12000.00",
      "acquisitionDate": "2023-11-02T14:19:52.539Z"
    }
  ]
}

Validation rules:

• Total lot quantities must equal the transaction quantity.
• Acquisition date must be on/before transfer date.
• Up to 100 lots per transaction.

4) Confirm the update

Re-fetch the transaction and verify:

• costBasis is no longer 0
• lots were accepted as submitted

Operational guidance

• Timing: Update cost basis as soon as possible after an in-kind deposit so downstream reporting reflects accurate lots and potential gains/loss.
• Source of truth: Use your internal records (exchange statements, wallet history, or prior custodians’ reports) to determine acquisition dates and basis.
• Auditability: Retain supporting documentation for the lot inputs used.

Troubleshooting

Common causes of failures:

• Lot quantities don’t sum to the deposit quantity.
• Acquisition date is after the transfer date.
• Too many lots (> 100).
• Asset mismatch between lots and deposit.
• Asset type is not recognized.

Appendix: Tax terminology