If you’re not reporting your Coinbase transactions on your taxes, you may face trouble with the IRS. A few years ago, the tax agency sent over 10,000 warning and action letters to Coinbase customers.
In this guide, we’ll break down everything you need to know about Coinbase’s tax reporting policies. We’ll also explain the different types of tax forms that Coinbase sends to customers and the IRS and what they mean for you.
How are my Coinbase transactions taxed?
Just like transactions on other platforms, cryptocurrency transactions on Coinbase may be subject to capital gains tax and income tax.
For more information, check out our complete guide to cryptocurrency taxes.
What tax forms does Coinbase send to the IRS?
Does Coinbase send income forms to the IRS?
Currently, Coinbase issues Form 1099-MISC to customers who’ve earned $600 or more of income through staking, interest rewards, and Coinbase Learn and Earn rewards.
Does Coinbase send capital gain forms to the IRS?
At this time, Coinbase doesn’t send tax forms detailing capital gains and losses to the IRS. However, this will change in the near future. Starting in the 2025 tax year, American exchanges will be required to issue Form 1099-DA — detailing gains and losses from crypto-assets.
Does Coinbase hand over customer information to the IRS?
In the past, Coinbase has shared customer information with the IRS. In 2016, Coinbase was required to hand over data on over 8 million transactions after being served a John Doe Summons.
What does the IRS do with the information Coinbase provides?
In the past, the IRS has used the information from 1099 forms to send warning letters to Coinbase users. It’s reasonable to assume that discrepancies between Form 1099 and a taxpayer’s return can increase the risk of a cryptocurrency tax audit.
What is the Coinbase gain/loss form?
Coinbase provides all customers with a gain/loss report — a summary that details every cryptocurrency disposal made on Coinbase that resulted in a capital gain or a loss.
It’s possible that your gain/loss form will be inaccurate if you’ve transferred crypto into or out of Coinbase (more on this below).
At this time, Coinbase doesn’t provide a record of your gains and losses to the IRS. However, Coinbase will likely begin reporting these transactions to the IRS starting in the 2025 tax year — when the crypto provisions of the infrastructure bill are scheduled to go into effect.
What should I do if I receive a Coinbase tax form?
If you receive a 1099-MISC from Coinbase, you should report this and all of your other crypto-related income on your tax return.
How to report your income may vary depending on the specifics of your situation.
Self-employed: If your cryptocurrency activities are part of a trade or business, your Coinbase income should be reported on Schedule C.
Not self-employed: If you are not self-employed, your Coinbase income can be reported as ‘Other income’ on Schedule 1.
Your Form 1099-MISC will not contain relevant tax information about disposal events subject to capital gains tax, such as selling your cryptocurrency for fiat. The burden is on you to calculate your tax liability for these transactions.
CoinLedger can help. The platform can integrate with your Coinbase account and pull in a complete record of all the trades you’ve made during the tax year. Once you’ve imported transactions from your other exchanges and wallets, you can generate a complete tax report with the click of a button.
What are 1099 forms?
1099 forms are designed to provide information to the Internal Revenue Service (IRS) about certain types of income from non-employment-related sources. Put another way, 1099 forms are designed to report income that you received that wasn’t from your employer.
Currently, Coinbase sends Form 1099-MISC to customers. Starting in the 2025 tax year, Coinbase will issue Form 1099-DA.
Form 1099-MISC: This form is used to report ‘miscellaneous’ income to the IRS. Rewards from referrals and staking would fall into this ‘miscellaneous’ category.
Form 1099-DA: Form 1099-DA was specifically designed to report capital gains and losses from digital assets — like cryptocurrencies and NFTs!
Does Coinbase send a 1099-MISC?
Coinbase sends Form 1099-MISC — which details the amount of income you have earned from Coinbase — if you meet the following criteria:
- Are a Coinbase.com customer
- Received $600 or more in cryptocurrency from Coinbase Earn, USDC rewards, and/or staking
- Are subject to US taxes
If you meet each of these three criteria, both you and the IRS will be sent a copy of your 1099-MISC.
Does Coinbase send a 1099-B?
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Coinbase does not issue Form 1099-B to customers. This form is typically issued by stockbrokers to report capital gains and losses from equities.
However, starting in 2025, Coinbase and other major exchanges will be required to issue Form 1099-DA — a form designed to report gains and losses from digital assets specifically.This Form will function very similarly to Form 1099-B.
Does Coinbase send a 1099-K?
Coinbase stopped issuing Form 1099-K to customers after 2020.
Because Form 1099-K shows gross transaction volume instead of total capital gains and losses, the IRS sent thousands of warning letters to Coinbase customers who accurately reported their taxes.
Coinbase stopped issuing this form to customers after 2020. For more information, check out our article on why Coinbase stopped issuing Form 1099-K.
How will mandatory 1099-DA reporting impact Coinbase customers?
Mandatory 1099-DA reporting may present problems for Coinbase customers in the future because of cryptocurrency’s unique properties.
Because cryptocurrency is so easily transferable, investors often move their coins between different wallets and exchanges. As a result, it’s difficult for exchanges to provide their customers with accurate tax reporting information.
Consider the following scenario.
In this case, David’s capital gain should be $0.
However, Coinbase has no way of knowing David’s original cost basis. As a result, it’s likely that his cost basis will be ‘n/a’ (or not reported) on Form 1099-DA.
In this case, the burden of proof will be on David to prove that he bought his Bitcoin for $10,000. Otherwise, he may be on the hook for a capital gain of $10,000.
Does Coinbase report small-time crypto traders?
Currently, Coinbase will issue Form 1099-MISC to you and the IRS only if you’ve met the minimum threshold of $600 of income during the year. In the future, Coinbase will issue Form 1099-DA to report all gains and losses from cryptocurrency for USusers.
What happens if I didn’t receive a 1099 form from Coinbase?
Even if you didn’t receive a 1099 form from Coinbase, you are required to report all of your taxable income from cryptocurrency. Not reporting your income is considered tax evasion, a crime with serious consequences.
Does Coinbase report to the IRS if you didn’t sell?
If you did not have taxable income during the year, it’s unlikely that Coinbase will report your cryptocurrency activity to the IRS. Simply holding cryptocurrency or transferring it between wallets you own is not considered a taxable event.
Still, it’s important to note that there are some situations where you may incur a tax liability even if you don’t ‘cash out’ to fiat currency. Two examples are earning cryptocurrency interest and trading your crypto for another cryptocurrency.
When will Coinbase send a 1099 form?
If you’ve met the requirements for receiving Form 1099-MISC from Coinbase, you’ll receive it by the end of February of the following year at the latest.
Will Coinbase send me a 1099 for 2024?
If you have more than $600 of ordinary income earned on Coinbase in 2023, the platform will issue Form 1099-MISC to you and the IRS. Mandatory 1099-DA reporting will not come into effect until the 2025 tax year.
How to access my Coinbase tax forms
If you’re looking for a copy of your Coinbase transactions for your own records, you can download a csv file by logging in to Coinbase on desktop, then clicking ‘Taxes’ on the left-hand side.
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Next, click the ‘Statements’ tab.
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Hare, you can input your preferred date range and download a record of your crypto transactions.
Alternatively, you can connect your Coinbase account to CoinLedger to automatically import your transactions and handle all of your tax reporting!
How crypto tax software can help
Cryptocurrency tax software like CoinLedger can help take the stress out of your tax season. The platform automatically connects with exchanges like Coinbase and blockchains like Ethereum to help you report your taxes in minutes!
Sign up for an account for free, import all of your historical trades and transactions, and automatically generate tax forms like 8949 with the click of a button. The whole process takes around 15 minutes!
Get started with a free preview report today.
