Note - 'Warning Trades' are now referred to as Negative Balance Warnings.

Negative Balance Warnings

Negative Balance Warnings happen when it appears that you are selling more of a coin than the system has record of you owning at the particular timestamp.

In other words, when the CryptoTrader.Tax engine detects that you appear to be selling more of a coin than you own, it flags the transaction as a Negative Balance Warning.

These warnings are almost always caused by missing data. It's likely that you haven't imported all of your necessary transaction history needed for calculating your taxes

How does this happen?

Imagine you bought 1 BTC on Coinbase for $1,000. You then sent this BTC to Binance to trade other coins. 

If you only upload your Binance trade history into CryptoTrader.Tax, CryptoTrader.Tax can't see that you originally acquired that BTC for $1,000 on Coinbase.

The original BUY transaction has not been uploaded, so it seems like that BTC appeared out of no where.

This triggers a Negative Balance Warning, because you haven't imported the data that shows how you acquired that BTC. The system doesn't have record of you buying that BTC (because you didn't import your Coinbase transaction history).

Now, when you go to trade that BTC on Binance, it looks like you are selling BTC that you don't even have—hence the negative balance.

If CryptoTrader.Tax can't detect when and how you initially acquired the crypto that you are trying to trade, there is no way for it to know at what US dollar value you acquired it at. Thus, there is no way to calculate your cost basis which is needed for tax purposes.

CryptoTrader.Tax will still run your report in spite of these warnings.  Learn how this will affect your report.

How Do I Fix A Negative Balance Warning?

As mentioned above, your negative balance warning is likely resulting from missing data. To fix your negative balance warning, you simply need to import whatever data is missing.

Below are the most common causes for missing data that we see.

Common Causes of Negative Balance Warnings:

  1. You didn't import the historical data from ALL of the exchanges or platforms that you bought, traded, earned, or transacted crypto on
  2. You didn't include your data from ALL of the years that you have transacted with crypto 
  3. You didn't include the crypto you received from mining, staking, interest earned, Coinbase Earn, or other forms of income (Learn how here)
  4. You traded on both Coinbase and Coinbase Pro but did not upload both exchanges
  5. You accidentally uploaded the same CSV file for an exchange twice resulting in duplicate trades that are triggering warnings
  6. You received crypto from a Binance distribution like the BNB rebate or from a fork but did not account for it. Please view our Binance Distribution article here.
  7. You purchased or sold crypto directly from your software wallet provider but did not import those buys/sells

Fix your Negative Balance Warnings by importing your missing data.

Still stuck? Think there is a different problem? Please reach out to our team here on Intercom. We are happy to help!

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