All-in-One Guide to US Coinbase Tax Documents

Even for the most experienced tax professionals, figuring out how much tax you owe on your assets can be challenging. To help you avoid any problems with the IRS, let’s break down a few standard forms. Each document will have its contents, the reason it was given to you, and its intended use described. 

So let’s dive right into Coinbase tax documents! But before that, here’s a quick recap of how the IRS estimates taxes.

IRS Crypto Taxes

Cryptocurrency is regarded as property by the Internal Revenue Service (IRS), and any profits or losses must be filed on Schedule D and Form 8949 as needed.

Despite the fact that cryptocurrencies are decentralized and virtual and that the IRS sees them as property, your gains and losses from crypto transactions will normally have an impact on your taxes.

Based on the time period you’ve held the cryptocurrency before trading or exchanging it, your gain or loss, like other assets that are subject to IRS tax, may be either short-term or long-term.

  • Any earnings are normally short-term capital gains if you possessed the cryptocurrency for less than a year before spending or selling it, and these are taxed at your regular income rate.
  • Any gains made if you kept the cryptocurrency for longer than a year are normally considered long-term capital gains and are taxed at long-term capital gains rates.

Coinbase Tax Documents

In no way does Coinbase offer tax advice. The IRS only requires exchanges and brokers to record “miscellaneous revenue,” but as a taxpayer, your obligations don’t stop there. When you submit your taxes, you must also disclose all of your capital profits and losses.

The Coinbase tax documents below were prepared by Coinbase and are not official IRS forms; rather, they are meant to get you started on your own assessments:

Gain and Loss Report

Your gain/loss report, as the name implies, is a summary of each Coinbase transaction you completed that contributed in a capital gain or loss, such as buying, selling, or converting cryptocurrency.

Here is an overview of what you will see:

  • Gain or loss
  • Long-term or short-term
  • HIFO approach of crypto tax calculation

Raw Transaction Report

You can balance all of your profits and losses using your raw transaction report before submitting your taxes if you or your CPA are willing to accept the challenge of manually estimating gains. The cost basis of each of your transactions is listed in this report, but gains and losses are not included.

IRS Tax Documents on Coinbase

If you file your own taxes, you’re generally used to putting your information into these IRS forms. Here is a short outline if you’re new to self-filing your taxes or are simply interested in these forms:

Tax Document Used For
Form 1040
  • US Individual Income Tax Return
  • Calculate your entire taxable income using this Coinbase tax form
Form 8949
  • Capital gains or losses from trading, exchanging, or otherwise disposing of your crypto
Schedule 1
  • Additional Income and Adjustments to Income
  • Report staking, mining, or other income from your 1099-MISC
1040 Schedule D
  • Part of your tax return that outlines your capital gains and losses

The Bottomline

Due to the increasing popularity of these virtual currencies, the IRS is ramping up its enforcement of tax reporting for cryptocurrencies. Because of this, you must maintain track of your cryptocurrency activities, keep your Coinbase tax documents handy if you’re using Coinbase for transactions and submit this data on the proper crypto tax forms to the IRS.

FAQs

  • How do I get tax documents from Coinbase?

Visit the Coinbase app on your phone. Then select [Taxes] and then [Documents] under Profile & Settings. Next, click on [Generate Report] to specify the report’s format and time frame, or [Download] to access one of the reports already displayed.

  • What happens if I don’t file Coinbase taxes?

If you fail to report the taxable cryptocurrency activity and are subsequently the target of an IRS audit, you risk criminal prosecution as well as interest and penalties. It could be interpreted as theft or tax evasion.

  • Does Coinbase give IRS a 1099?

Yes, through Coinbase.com and Coinbase Pro, Coinbase provides the IRS Form 1099-MISC for incentives and/or fees. Coinbase will issue double copies of Form 1099-MISC to the IRS for any US cryptocurrency trader who earned more than $600 in the prior fiscal year: one for the taxpayer and one for the IRS.


Interesting Related Article: “Cryptocurrency – Where Will It Be in the Next 5 Years?