You can generate your gains, losses, and income tax reports from your Coinbase investing activity by connecting your account with CryptoTrader.Tax. There are a couple different ways to connect your account and import your data:
Both methods will enable you to import your transaction history and generate your necessary crypto tax forms in minutes. File these forms yourself. take them to your tax professional, or import them into your preferred tax filing software like TurboTax or TaxAct.
Cryptocurrencies like bitcoin are treated as property by the IRS and many other governments around the world. Other forms of property that you may be familiar with include stocks, bonds, and real-estate.
Just like these other forms of property, cryptocurrencies are subject to capital gains and losses rules, and you need to report your gains, losses, and income generated from your crypto investments on your taxes.
For a complete and in-depth overview, please refer to our Ultimate Guide to Cryptocurrency Taxes.
To do your cryptocurrency taxes, you need to calculate your gains, losses, and income from your cryptocurrency investments in your home fiat currency (for example US Dollars).
Once you have your calculations, you can fill out the necessary tax forms required by your country. You can learn which tax forms are required in the United States here.
In short, it depends.
You may not have to “pay” taxes if you only had capital losses (i.e. you lost money on all of your crypto investments); however, you still have to report your crypto activity on your taxes yearly—even if you only had losses on your tax return.
If you had capital gains or other forms of crypto income, you will have to pay taxes on that income.
Many cryptocurrency investors use additional exchanges and platforms outside of Coinbase. Perhaps you trade on Uniswap or earn interest from BlockFi. The trouble with Coinbase's reporting is that it only extends as far as the Coinbase platform. If you use additional cryptocurrency wallets, exchanges, DeFi protocols, or other platforms outside of Coinbase, Coinbase can't provide complete gains, losses, and income tax information.
Coinbase states that their tax calculators won't be accurate if you:
Coinbase has certain reports and tax documents that you can use to help get your crypto taxes done. The Coinbase Transaction History CSV file contains a record of all of your buys, sells, transfers, and investment activity that occurred within your Coinbase account.
You can use this file to calculate your gains, losses, and income, or you can import this report directly into crypto tax software like CryptoTrader.Tax.
Cryptocurrency can be sent to any wallet address and any platform in the world. Transferability is core to the idea cryptocurrency; however, transferability also makes it difficult for Coinbase and any other exchange to give tax records that include cost basis information (original purchase price of an asset).
Because of this limitation, Coinbase does not send 1099-B's with cost basis information like traditional brokerages.
It's up to you to keep track of your cost basis across your crypto platforms. CryptoTrader.Tax will do this automatically for you.
In prior years, Coinbase has sent out 1099-K forms to customers. This has caused confusion amongst taxpayers as 1099-K only reports gross proceeds from your Coinbase transactions (not cost basis). As a result, these forms can make it appear as though you have made inaccurately large sums of money on Coinbase.
Due to this confusion, Coinbase has since stopped issuing Form 1099-K.
You can learn more about what to do if you receive a 1099-K here.
Coinbase reports some of your transaction activity to the IRS if you meet certain criteria. Coinbase will send both you and the IRS a copy of a 1099-MISC if:
- You are a Coinbase customer AND
- You are a US person for tax purposes AND
- You have earned $600 or more in rewards or fees from Coinbase Earn, USDC Rewards, and/or Staking in 2020.
Coinbase no longer issues 1099-K's from customer account activity.
Keep in mind, the 1099 reporting requirements for cryptocurrency exchanges is likely going to change in the future. Our tax professional team at CryptoTrader.Tax tracks these updates closely, and we will keep our users aware of any major reporting updates that may effect them.
1099 information reporting has been around for a long time. There are exactly 20 different types of 1099’s in existence today (1099-K, 1099-MISC, 1099-B, 1099-DIV, etc.). Each of them serve the same general purpose: to provide information to the Internal Revenue Service (IRS) about certain types of income from non-employment-related sources.
Put another way, 1099’s are sent out to report on the income that you received that wasn’t from an employer.
1099’s give both you and the IRS records of your non-employment income. If the IRS receives a 1099 detailing income that you did not report on your tax return, it automatically gets flagged.
Learn more about how Coinbase reports to the IRS.