Negative Asset Balance Report

The negative asset balance report identifies the first instance of an asset balance going below zero, for each asset and account. The three main causes of an asset going negative are:

Missing an acquisition transaction
Timestamps causing transactions to be in a different order than they occurred
Fees being incorrectly netted into the sent and received quantities

Consider a scenario involving two transactions:

2025-01-01T00:00:00.000Z: A Sell transaction of 1 BTC
2025-01-01T00:00:03.000Z: A Deposit transaction of 1 BTC

Even though the balance of the asset should ultimately be zero, the account entered a negative state after the Sell. When the system attempted to process the Sell, there was no available lot of BTC to draw from, leading to a disposition with missing cost basis.

Although Taxbit can still generate the required tax forms (e.g., Form 1099-DA) for an account that has experienced a negative balance, the resulting data is inherently compromised.

Missing Cost Basis: For the disposition that caused the negative balance (the Day 1 Sell in the example), the system will be unable to determine the actual cost basis of the asset sold. Consequently, the transaction report would show a missing cost basis, leaving the calculation of capital gains or losses incomplete or inaccurate.
Contamination of Future Data: The most severe consequence of a negative asset balance is the potential to render all future cost basis calculations for that specific asset and account unreliable. Since cost basis tracking (e.g., using FIFO, LIFO, or specific identification) relies on an unbroken chain of ownership and acquisition costs, a negative balance breaks this chain. Any subsequent buy or sell transactions will have an incorrect starting point or a contaminated pool of lots, propagating the error forward indefinitely.

See below for a description of each of the fields on the negative asset balance report.

Field	Description
account id	The unique id of the account that incurred the negative asset balance.
asset	The specific digital asset (e.g., USDC, ETH, BTC) that has a negative balance.
transaction id	The unique identifier of the transaction that caused the asset balance to become negative.
transaction type	The transaction type of the transaction that caused the asset balance to become negative.
date	The date of the transaction that caused the asset balance to become negative.
amount negative	The exact amount of the initial negative balance recorded immediately after the triggering transaction
first transaction for asset for account	This is an indication that the transaction that caused the balance to become negative is the first transaction for that asset and account. This is a clear indication that an acquisition transaction is missing, or out of order.
furthest negative balance	The deepest negative balance reached for the asset for that account.
total negative transactions	Total number of transactions after and including the transaction that caused the asset balance to become negative, for that asset and account.
total asset transactions	Total number of transactions for that asset and account. This field, and the one directly above, can be used to help identify an account with a lower volume of transactions for review purposes.