If you’re a US-based Coinbase user, you may have been surprised to find a 1099-B form in your mailbox this tax season. For those who don’t know, a 1099-B is a form used by the IRS to report capital gains and losses from the sale of securities, commodities, and other property. So what does it mean that Coinbase is sending out 1099-Bs?
In short, it means that if you sold any cryptocurrency on Coinbase in 2017, the IRS now considers you to have realized a capital gain or loss on that transaction. This is true even if you didn’t actually receive any cash for your sale; for example, if you sold BTC for ETH, the IRS still considers that a sale of BTC for cash ( USD).
NOTE: WARNING: Coinbase is not obligated to provide 1099-B forms to US customers. Coinbase does not provide individualized tax advice or services, and customers should consult their own tax advisors if they wish to determine their liability and filing requirements. Customers should also be aware that Coinbase does not track the cost basis of cryptocurrency transactions and is unable to provide this information on customer request.
This may come as a shock to some users, as cryptocurrency is often thought of as being outside the purview of government regulation. However, the IRS has been clear that it views cryptocurrency as property, not currency, and therefore capital gains taxes apply.
So what should you do if you receive a 1099-B from Coinbase? First, don’t panic! Second, make sure to accurately report your gains and losses on your tax return. Andthird, if you have any questions, consult with a tax professional.
While it may be unexpected to receive a 1099-B from Coinbase (or any other exchange), it’s important to remember that this is simply the exchange doing its duty to report your transactions to the IRS. So long as you accurately report your gains and losses, there’s nothing to worry about.
4 Related Question Answers Found
As a US-based exchange, Coinbase is required to report your gains to the IRS. This means that if you made any money from trading on Coinbase in the last tax year, you will need to file a tax return. If you made more than $20,000 in profit from trading on Coinbase, you will also need to file a Form 1099-K.
If you’re a US-based trader, you probably know that Coinbase sends 1099 forms to the IRS come tax time. But what exactly is a 1099 form? Do all exchanges send them?
At the end of each tax year, Coinbase will send you a 1099-K form if you have made over $20,000 in total sales of digital currency, and over 200 transactions. The 1099-K form reports your total gross income for the year from Coinbase. You will use this form to file your taxes.
As a US-based exchange, Coinbase is required to report information to the IRS about customers who have made over $20,000 in profits from trading on the platform. In order to do this, Coinbase will send out 1099-K forms to these customers come tax season. So, if you made over $20,000 in profits from trading on Coinbase Pro in a given year, you can expect to receive a 1099-K form from the exchange come tax time.
