As one of the most popular cryptocurrency exchanges in the United States, Coinbase is frequently asked whether it provides 1099 forms to its customers. The answer is no – Coinbase does not provide 1099 forms.
This may come as a surprise to some, as many other financial institutions do provide 1099 forms. However, there are a few reasons why Coinbase does not provide them.
For one, Coinbase is not considered a financial institution by the IRS. This means that it is not required to provide 1099 forms to its customers.
NOTE: Coinbase does not provide a 1099-B form. This form is required by the IRS for reporting capital gains and losses on investments, and any income earned from virtual currency transactions. Coinbase does not provide this form, so it is important for customers to track their own capital gains and losses in order to accurately report their taxes. Failure to do so may result in penalties or other legal consequences.
Additionally, because Coinbase does not hold customers’ funds in accounts, it also does not fall under the category of a broker-dealer, which would be required to provide 1099 forms.
So why do some exchanges provide 1099 forms and others don’t? It really comes down to customer preference. Some exchanges feel that providing 1099 forms gives their customers a sense of security and peace of mind knowing that their transactions are being reported to the IRS.
Other exchanges, like Coinbase, believe that providing 1099 forms is not necessary and adds an unnecessary layer of complexity for their customers.
In the end, it’s up to the customer to decide whether they want to use an exchange that provides 1099 forms or not. For those who do want this type of documentation, there are plenty of other exchanges out there that will provide it.
4 Related Question Answers Found
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?
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.
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.