How are my Coinbase transactions taxed
Coinbase reports user activity to the IRS under specific conditions, so it’s important for US traders to understand what information is shared. Preparing accurate tax filings helps avoid potential issues with the IRS.
Specifically, Coinbase reports Form 1099-MISC for users earning over $600 in rewards or staking in a tax year. This form does not cover capital gains or losses from trading activities, which users must calculate and report separately. For more on reporting these, see our guide to reporting crypto for taxes.
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What information does Coinbase send to the IRS
Coinbase provides the IRS with a copy of each 1099-MISC it issues to users. This form signals to the IRS that the user has crypto-related income that must be reported.
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Gain/loss report
The 1099-MISC does not include your gains or losses. While it notifies the IRS of crypto activity, it’s still the user’s responsibility to report all capital gains or losses on their taxes.
Raw transaction report
Coinbase does not send the IRS raw transaction data, but users can access their full transaction history for reporting. Coinbase’s transaction tools allow users to download detailed reports for accurate tax filings.
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What does the IRS do with tax documents
The IRS uses 1099 data to track digital asset income and identify taxpayers who may have yet to report it accurately. In some cases, this may result in letters like 6173 or CP2000 requesting additional information or prompting action if discrepancies are found.
The IRS’ growing focus on crypto enforcement means accurate reporting is essential. Failing to do so can lead to additional scrutiny or penalties.
Looking to calculate your crypto taxes? Try our free crypto tax calculator.
What are 1099 forms
1099 tax forms document payments made to individuals outside of employment. Coinbase issues Form 1099-MISC to report rewards and staking income over $600.
Will I get a Coinbase 1099 form?
If your earnings from rewards or staking exceed $600, Coinbase will send a 1099-MISC form. The IRS will also receive a copy.
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Does Coinbase share other information with the IRS?
Yes, Coinbase shares 1099-MISC forms with the IRS but does not disclose every individual transaction.
Does Coinbase report conversions?
No, Coinbase does not report crypto-to-crypto conversions. Taxpayers are still required to report any gains or losses from these conversions.
How do I get a complete tax report from Coinbase?
To get a full record of transactions, go to Coinbase’s Taxes section and download your history. TokenTax’s crypto tax software can sync with Coinbase to streamline reporting.
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Accessing your Coinbase tax documents
Even if you don’t receive a 1099-MISC, all income, gains, or losses on Coinbase must be reported. TokenTax’s crypto tax calculator can sync with Coinbase via API, automatically updating your transaction history for streamlined reporting.
If you prefer to download your history manually, visit the Taxes section of your Coinbase account for gain/loss reports and raw transaction history CSVs. Accurate records ensure compliance with IRS requirements.
Does Coinbase report to IRS FAQs
Am I required to pay taxes on Coinbase transactions?
US taxpayers must report all taxable activities on Coinbase to the IRS, including rewards, staking, and crypto sales. Coinbase reporting to the IRS helps enforce this, but users are responsible for declaring their full crypto activity.
Will Coinbase send me a 1099?
Coinbase sends Form 1099-MISC to users who earn over $600 in rewards or staking. This report is provided to the user and the IRS as part of Coinbase’s IRS reporting obligations.
What does Coinbase report to the IRS?
Coinbase reports income over $600 from rewards and staking to the IRS via Form 1099-MISC. While this form covers specific income types, users must report other gains and losses not included on it.
Does Coinbase report conversions to the IRS?
No, Coinbase does not report crypto-to-crypto conversions to the IRS. However, taxpayers must still report gains or losses from these conversions on their own tax returns.
How do I ensure compliance if Coinbase reports to the IRS?
To stay compliant, users should report all taxable transactions on Coinbase, including income types not listed on the 1099-MISC. Tools like TokenTax’s tax software help users accurately report Coinbase activities to the IRS.
Do all crypto exchanges report to the IRS like Coinbase?
Only certain crypto exchanges report to the IRS. Some exchanges, for example, don’t do business with US customers and generally do not report to the US tax authorities. However, Coinbase is a major US-based exchange that reports certain income to the IRS for compliance.
What happens if you don’t report Coinbase income to the IRS?
Failure to report Coinbase income could lead to IRS penalties, starting at 5% of unpaid taxes for each month the tax return is late. Coinbase’s IRS reporting increases the likelihood of IRS action if users don’t report all required income.
How can I avoid IRS penalties if Coinbase reports my income?
If Coinbase reports your income to the IRS, ensure full compliance by accurately reporting all crypto transactions, even those not on the 1099. Strategies like offsetting gains with losses may help reduce your overall tax liability.
Does Coinbase report rewards from Coinbase Earn to the IRS?
Yes, Coinbase includes rewards from Coinbase Earn in its 1099-MISC reporting to the IRS if they exceed $600. Taxpayers should include all Coinbase Earn rewards in their annual tax return.
What should I do if I don’t receive a 1099 from Coinbase?
If you don’t receive a 1099 but have income from Coinbase, you must still report it to the IRS. Coinbase’s IRS reporting helps ensure compliance, but individual taxpayers must report all income accurately.
How do I access my full tax report if Coinbase reports to the IRS?
For a complete tax report, go to the Taxes section in your Coinbase account to download transaction history. TokenTax’s software can help automate Coinbase reporting for IRS compliance.
Does Coinbase report my raw transactions to the IRS?
No, Coinbase does not provide the IRS with raw transaction data. Users can download their full transaction history from Coinbase and must report gains or losses on conversions or trades not captured in the 1099.
When does Coinbase report to the IRS?
Coinbase reports income annually to the IRS if it meets the $600 threshold for staking or rewards, aligning with the tax year-end. Users should check if Coinbase reported to the IRS by reviewing any 1099 forms issued.
What tax documents does Coinbase provide for IRS reporting?
Coinbase issues Form 1099-MISC for users with over $600 in staking or rewards, which is also reported to the IRS. Users can access additional reports, like gain/loss summaries, directly from their Coinbase account.
How can I access Coinbase’s tax documents for IRS compliance?
Visit the Taxes section in your Coinbase account to access 1099 forms and other transaction reports. Accurate records help ensure compliance if Coinbase reports to the IRS on your behalf.