Cryptocurrency exchanges around the world are starting to report more and more information to government agencies. In this guide, we analyze Crypto.com’s tax reporting policies within United States. We’ll also break down a simple way to report your Crypto.com taxes in minutes.
Does Crypto.com report to the Internal Revenue Service (IRS)?
Crypto.com sends Form 1099-MISC detailing taxable income from cryptocurrency to both customers and the IRS.
In the past, Crypto.com issued Form 1099-K to customers. However, this form caused confusion for both customers and tax authorities — and even led to warning letters being sent to customers who had accurately reported their taxes!
Do I have to pay taxes on my Crypto.com transactions?
Yes. In the United States, your transactions on Crypto.com and other platforms are subject to income and capital gains tax.
If you’ve earned or disposed of crypto (ex. Sold or traded away cryptocurrency) during the year, you’ll have a tax liability to report to the IRS.
For more information, check out our complete guide to cryptocurrency taxes.
Is Crypto.com legal?
Yes. Crypto.com legally operates in the United States.
How do I avoid Crypto.com taxes?
Remember, there is no way to legally evade your taxes in the United States. However, tools like tax-loss harvesting and cryptocurrencytax software can help you save thousands of dollars legally.
For more information, check out our guide on how to avoid crypto taxes.
Get a Crypto.com tax report today
Looking for a simple way to report your Crypto.com taxes? With CoinLedger, you can import your Crypto.com transactions and auto-generate a complete gains, losses, and income tax report in minutes.
CoinLedger integrates with Crypto.com and dozens of other wallets, blockchains, and cryptocurrency exchanges to automate the entire crypto tax reporting process.
You can get started with a free preview report today.
FAQs
Yes. In the United States, your transactions on Crypto.com and other platforms are subject to income and capital gains tax.
Will the IRS know if I don't report crypto? ›
Crypto tax evasion and crypto tax avoidance are illegal. The IRS likely already knows about your crypto investments. There are two kinds of tax evasion - evasion of assessment and evasion of payment. Evasion of assessment is willfully omitting or underreporting income.
Does IRS track your crypto? ›
Yes, Bitcoin and other cryptocurrencies can be traced. Transactions are recorded on a public ledger, making them accessible to anyone, including government agencies. Centralized exchanges provide customer data, such as wallet addresses and personal information, to the IRS.
Do I have to answer IRS crypto question? ›
The Internal Revenue Service reminds taxpayers they must answer the digital asset question and report all digital asset related income when they file their 2023 federal income tax return.
Does IRS audit crypto? ›
Here's how a cryptocurrency tax audit works. If the IRS decides to audit your cryptocurrency taxes, they'll send you a letter. Audits can happen through mail or in-person interviews. By law, you must keep tax records for at least three years, but the IRS can look at the past six years.
What happens if I forgot to report crypto on taxes? ›
If you forget to report crypto on your taxes, it's crucial to address it promptly. The IRS has intensified its focus on crypto tax enforcement, and failure to report may result in penalties, interest, and even criminal charges. You can amend your returns using Form 1040-X to rectify omissions.
What crypto wallet does not report to the IRS? ›
Certain cryptocurrency exchanges and apps do not report user transactions to the IRS. These include decentralized exchanges (DEXs) and peer-to-peer (P2P) platforms that do not have reporting obligations under US tax law.
Does crypto.com report to the IRS? ›
Yes. In the United States, your transactions on Crypto.com and other platforms are subject to income and capital gains tax. If you've earned or disposed of crypto (ex. Sold or traded away cryptocurrency) during the year, you'll have a tax liability to report to the IRS.
What is the most anonymous crypto wallet? ›
The Top Anonymous Bitcoin Wallets Ranked
Ellipal Wallet – High-security, air-gapped wallet supporting 10,000+ digital assets. Ledger Nano X – Hardware wallet with multi-currency support and extreme security measures. Trezor Model T – Offers advanced security with a touchscreen for easy management.
How does the IRS think of crypto? ›
Though a form of "currency," any form of virtual currency, for federal tax purposes, is treated as property (and not cash). For this reason, principles of property taxation apply to transactions relating to virtual currency.
The IRS treats cryptocurrency as property, meaning that when you buy, sell or exchange it, this counts as a taxable event and typically results in either a capital gain or loss.
What are the odds of getting audited for crypto? ›
– However, crypto holders are estimated to have an audit rate of around 2% – 5%, higher than average. – The more activity/transactions with crypto, the higher audit risk seems to be based on professional estimates.
Has anyone been audited for crypto? ›
The IRS has made one thing clear in recent years - they're cracking down on crypto and IRS crypto audits are on the rise. So if you're one of the many investors who has received a notice or an audit request, don't panic.
What is the penalty for not filing crypto taxes? ›
Not reporting your cryptocurrency transactions can result in civil fines and penalties of up to $100,000 and criminal sanctions of up to five years in prison.
Do I have to report crypto if I didn't get a 1099? ›
Further, even if you don't receive 1099s from crypto exchanges, brokers, or other companies who paid you for crypto activities, you should always report all of your reportable crypto transactions and income on your tax return.
What happens if you don't file taxes on Coinbase? ›
Even if you don't receive a 1099-MISC from Coinbase, you are still required to report any income or capital gains/losses on your taxes. Failure to report this income could lead to penalties from the IRS.
Which crypto is untraceable? ›
Monero transactions are confidential and untraceable.
Because every transaction is private, Monero cannot be traced. This makes it a true, fungible currency. Merchants and individuals accepting Monero do not need to worry about blacklisted or tainted coins.
