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Is It Possible to Get Tax Forms Through Coinbase?

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Is It Possible to Get Tax Forms Through Coinbase?

Following Coinbase’s announcement that it would stop giving Form 1099-K to its customers, there have been potentially significant tax repercussions. So, the current query is: Does Coinbase still offer tax forms?

Coinbase would rather send customers a Form 1099-MISC. However, the 1099-MISC form of Coinbase may not contain all of the information you require to properly file your cryptocurrency taxes.

But if Coinbase does provide tax forms, so we will find out things customers got to realize.

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Coinbase Tax Forms

Contrary to common opinion, there are other things that have to be disclosed when it pertains to cryptocurrency taxes than financial gains and losses.

In Coinbase tax filings, a cryptocurrency that is subject to regular income tax is mentioned.

Form 1099-K From Coinbase

Form 1099-K is typically used by credit, debit, and other associated payment systems.

The number of transactions you have handled can be seen by the IRS on the form.

Instead of providing earnings and losses, as these are the real statistics you need for cryptocurrency tax reporting, Form 1099-K pretty much describes the whole of your transactions throughout your account and reports that estimate to the IRS.

Due to this, consumers seemed to have a substantial quantity of untaxed income on their tax filings whenever Coinbase originally issued Form 1099-K.

IRS Reporting Threshold For Coinbase

Customers that satisfy the requirements below will often get a 1099-MISC form from Coinbase:

· You are a Coinbase customer.

· You live in the United States.

· You obtained at least 600 dollar worth of rewards through Coinbase Earn, UDSC Rewards, or staking.

Is Form 1099-K Offered By Coinbase?

Due to some misunderstanding, Coinbase stopped distributing Form 1099-K after 2020.

Numerous Coinbase customers received CP2000 letters from the IRS saying that they grossly underreported their earnings during the year that is because the 1099-K showed the entire number of transactions.

Coinbase’s 1099 Situation Right Now

Coinbase now distributes Form 1099-MISC. This form is used to report “miscellaneous revenue” such as referral and staking bonuses.

You must still declare gains, losses, and profits on your tax return even if you don’t get a Form 1099 for the cryptocurrencies.

The CP2000 Letter: What Is It?

The CP2000, also recognized as an IRS Notice CP2000, contains precise information on the problems as well as recommendations for people on how to resolve the vulnerabilities the IRS found.

Are 1099-B Tax Forms Sent By Coinbase?

As a result of the passage of the 2021 infrastructure bill, Coinbase will presumably soon be required to give 1099-B forms to all customers. The information on the sale of assets like cryptocurrencies is to be gathered using this form.

Coinbase Tax Forms: The Situation Currently

If you utilized Coinbase during 2014 and 2019, and although Coinbase no longer issues Forms 1099-K to customers, you may still be subject to its tax ramifications. Form 1099-K only discloses total sales volume, it does not provide your cost basis.

In contrast, a 1099-MISC discloses Coinbase’s regular revenue. The 1099-K, therefore, tends to overreport your total capital gains since it does not take into account the cost of the cryptocurrency you purchased and later sold.

IRS crypto letters were sent to thousands of cryptocurrency traders who thought they had underreported their income.

A lot of the time, these mailings depend on falsified information from Form 1099-K.

Since Coinbase previously delivered insufficient tax records, the 1099-MISC is an improvement over those forms.

Conclusion

This article provides details on the various tax forms that Coinbase provides.

Although many of these forms have changed over the years, this article discusses the reasons the IRS is concerned and the actions they have taken to address cryptocurrency underreporting.

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