Julian is a staff writer at CNET. He's covered a range of topics, such as tech, travel, sports and commerce. His past work has appeared at print and online publications, including New Mexico Magazine, TV Guide, Mental Floss and NextAdvisor with TIME. On his days off, you can find him at Isotopes Park in Albuquerque watching the ballgame.
As bitcoin and a slew of other cryptocurrencies continue to slide Monday, Coinbase unveiled a new suite of resources designed to provide tax assistance to customers. Coinbase's tax center will allow US users to see all of their taxable activity relating to cryptocurrency in one place on the platform. The company will also send 1099-MISC forms to users who earned at least $600 from staking rewards, interest, forks and airdrops in 2021.
As part of its new tax support rollout, Coinbase previouslypartnered with CoinTracker, a crypto tax software provider. If Coinbase users send and receive from Coinbase Pro or external cryptocurrency wallets, they can receive a report from CoinTracker on up to 3,000 transactions. Coinbase is also offering customers a $20 discount for Intuit's TurboTax tax filing software.
Individuals who bought and held crypto assets -- on Coinbase's exchange or elsewhere -- in 2021 will not be required to report anything about it on their return this year. The IRS, which is reported to be more closely scrutinizing cryptocurrency trading, does require reports of capital gains or losses, however, which occurs when an asset is sold or traded. (Read more about how to determine if you owe taxes on your cryptocurrency transactions.)
Coinbase customers will be able to look at all of their taxable activity to see if they owe taxes and how much they need to pay. Coinbase provides a summary of your activity -- including which assets you bought, sold, sent or received -- categorized by date, realized gain/loss and their tax impact.
Coinbase's tax center will allow US users to see all of their taxable activity relating to cryptocurrency in one place on the platform. The company will also send 1099-MISC forms to users who earned at least $600 from staking rewards, interest, forks and airdrops in 2021.
Buying crypto with cash and holding it: Just buying and owning crypto isn't taxable on its own. The tax is often incurred later on when you sell, and its gains are “realized.”
In summary, Coinbase does report certain transactions to the IRS – namely, any sales of cryptocurrency that exceed certain thresholds and any crypto holdings that exceed $10,000 – but it's up to the individual investor to accurately report their taxes owed based on their own gains and losses.
Yes, the IRS can track crypto as the agency has ordered crypto exchanges and trading platforms to report tax forms such as 1099-B and 1099-K to them. Also, in recent years, several exchanges have received several subpoenas directing them to reveal some of the user accounts.
You owe taxes on any amount of profit or income, even $1. Crypto exchanges are required to report income of more than $600 for activities like staking, but you still are required to pay taxes on smaller amounts.
It's important to note: you're responsible for reporting all crypto you receive or fiat currency you made as income on your tax forms, even if you earn just $1.
There are a number of crypto exchanges that do not issue 1099 forms nor collect KYC data for most small traders including: KuCoin. OKX (excluding for P2P trades)CoinEx.
Yes, cryptocurrency losses can be used to offset taxes on gains from the sale of any capital asset, including stocks, real estate and even other cryptocurrency sold at a profit.
If an exchange like Coinbase goes bankrupt, the customer assets it holds may be subject to bankruptcy proceedings. But is your Coinbase wallet safe from bankruptcy? If Coinbase filed for bankruptcy, all of the company's assets and the customer assets it holds would first be divided up to cover money owed to creditors.
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