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No problem.Originally Posted by Roscoe_Word
I was just trying to help out. I know a little bit about tax forms. Was hoping to give you a decent answer and trying to save you a few bucks from your Tax friend.
If there is an amount in box 1a. That is the amount Coinbase is reporting to the IRS that you made from trading. Which is kind of hard to believe... because how would they really know your gains from trading?
Hello MS. Here's a copy-paste job of Coinbase's 1099 form I had to submit to my accountant.No problem.
If there is an amount in box 1a. That is the amount Coinbase is reporting to the IRS that you made from trading. Which is kind of hard to believe... because how would they really know your gains from trading?
Box 1a: Gross amount of
payment card/third party
network transactions
$1,561.00
Box 3: Number of payment
Transactions 1
Box 5l: Dec
$1,561.00
Box 1a. Shows the aggregate gross amount of payment card/third party network transactions made to you through the PSE during the calendar year.
Box 3. Shows the number of payment transactions (not including refund transactions) processed through
the payment card/third party network.
Boxes 5a-5l. Shows the gross amount of payment card/third party network transactions made to you for each
month of the calendar year.
Thanks for the help, brother. I just don't think I made $1,500 with BTC. I think the terms "gross profit" and "transactions" are 2 different numbers.
I think I understand what Coinbase is doing....
Coinbase is claiming that... all transactions from their organization.... your buys/sells conclude to a net gain. You may of purchased/sold and lost at other establishments.... but Coinbase feels it's necessary to report on their end.
Which is odd... because a 1099-K is supposedly only to be used for 200+ transactions AND 20k+ net gains.
I had to check my email for a Coinbase 1099-K.... I know I never sold anything there.... and I didn't receive a 1099. I have no idea why they would report $1,561.00 on your end. It's extremely petty on their part.
I'm sorry you have to go through this. Ridiculous. All the best.
Thanks for the input, MS. You're a good help at this forum.
I probably do worry a bit more than I should, but that is my nature.
I did not receive a 1099-K. Although I don't know why. I was below the 200 transaction threshold, but above the $20,000 one. I suspect they must have applied "and" to the criteria instead of "or" (I've seen it written both ways). As such, I feel somewhat free to make my own decision on how to proceed. Presumably "IRS Tax Notice 14-21" was still the operative document covering 2017. It is somewhat ambiguous in my situation. As such, I feel as though I have 3 options for reporting on my 2017 taxes.
1. Use the reports generated by Bitcoin.tax.
2. Use the reports generated from my ledger system. It's not done yet, but presumably will closely match Bitcoin.tax's numbers.
3. Simply lump all of my crypto transactions as one property transaction and report the amount of cash I deposited and the amount withdrawn. My net gain would be the difference in these two.
I do use tax preparation software and haven't yet started that process. This software might present me with another option or clearly identify which should be used. Quite frankly, I doubt that it will.
The 3 alternatives have net gains varying by a factor of 10. I will choose the least expensive of the alternatives. I will document my rationale and should a question ever arise plead ignorance.
Andreas Antonopoulos said he was just informed by coinbase that they turned over his account to the IRS.
https://twitter.com/aantonop/status/967160225378660352
This thread prompted me to search my email for 1099-K. It was there. Coinbase sent it. You have to click a link in the email.
I'm not a tax guy but I think this just shows sales. The tax payer has to provide the cost basis. With those two you get a taxable profit.
Dear XXXXXXXXXXX,
Coinbase, Inc. has issued an IRS form 1099-K for you for tax year 2017 using Track1099, an IRS-approved vendor.
You may retrieve your form electronically by clicking on the blue button below. Doing so gives Coinbase, Inc. a record of e-delivery, which is required by the IRS.
Or, copy and paste this link into your browser:
https://www.track1099.com/retrieve/4...20c6-4e5d-xxxx To validate your identity, you'll be asked to enter the last 4 digits of your Tax ID number.
I would truly advise all posters to find a way to trade and move without using Coinbase.
You don't need these extra headaches.
Yes, you are correct. They are sell offs only. But let me be the first to tell you and everyone.... that Coinbase is a BIASED BUSINESS. If this was truly a professional "client/business" relation... they wouldn't hang their clients out to dry. I can't even find a word to describe this... other than TOTAL BULLSH#$.
First of all... if they treated their customers with professionalism... they would have some form of profit/loss for each SSN on record. Showing your sales is the ultimate blow. You're literally kneeling and at the mercy of the IRS at the moment.
It's 100% unfair to you as a client.
Yea, you're right, MS. Not to mention the $300 they clipped from me and the $1900 from Philly.
(I got my money back, hope the same for Philly)
I went with them cause I didn't wanna wire to and from an exchange. Coinbase had the "bank withdrawal method."
Just called my old guys (Vinny and Rocco..LOL) back from the day. Looks like I might be able to go online with a local and "meet the guy" every week.
Haven't done that since the roarin 80s (lol)
Thanks for your help with BTC and Sportsbook issues.
You know your stuff, brother.
That 1099-K is confusing as fvckk.
It showed me at 8 figures. I did a lot of arbing but that's still bout 8 figures too many.
Turns out the Total box 1b is total sales.
Tax time is a biatch with this stuff. I'm using bitcoin.tax but not confident in it. Going to take a lot of work to unfvck this.
Coinbase was great to buy with your CC. That's the only advantage in my book.
I don't know how long we have until these other Exchanges follow suit with Coinbase. But Gemini is a great alternative. I'm sure you're a little leery in using anything at the moment. I like gemini because:
1. You can fund your acct 500 a day MAX debit ACH from bnk. (Each 500 takes 5 business days to clear.)
2. You can wait until your acct is fully funded... then can purchase Bitcoin. One of the fairest rates per any exchange.
3. Very fair sell price as well. One of the best around.
4. You can keep your balance in USD or BTC anytime... or BOTH.
5. 30 Free BTC networking transactions per each calendar month for every client. (Gemini pays miner's fee 100%)
But again... like I said above... who knows when all exchanges are going to follow suit like Coinbase did.
No tx forms from Gemini. No tx forms from Bitpay.
But this Coinbase situation has opened my eyes wider.
It shows.... you can never be too cautious or careful.
For all the other posters who are using Gemini.... they did revise the TOS about 3 months ago. In regards to the G WORD....
Accts that are found funding in regards to wagering sites.... will be frozen immediately.
I try to tone it down myself.... but lucky enough... my acct was never frozen or questioned. I don't know if this is just a scare tactic in their TOS.... or what? It might be wise to never leave USD or BTC in your acct. Make sure you move it elsewhere if you're unsure. Again, this is when those FREE BTC NETWORKING TRANSACTIONS come in handy.
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That's just simply wrong for Coinbase to do. It's just sickening.
You would only assume that Coinbase is just kissing the IRS's a$$ because of that subpoena from past years??? But man... it's just so WRONG on so many levels.
So basically the 1099 shows Million+ in gains.... but nothing to offset? That's just wrong. So wrong. Shameful on Coinbase's part.
I suspect that Gemini will start providing the IRS with information in the future (along with Kraken, Bittrex, Poloniex, and all other U.S. based exchanges). Bitpay is another issue. I suspect the IRS could argue that they are just another way of selling coins and should report the sales. But then that would imply that buying a pizza with BTC is a sale of BTC and should be reported to the IRS by the pizza seller. I don't know.
CB did challenge the US in court and the IRS did not get all it wanted.
I've been looking at the documentation on Bitcoin.tax. Here is a disturbing FAQ.
"I bought some things with Bitcoins directly, do I owe taxes?
Probably, but depends on your country. If it's considered as a tax event, then you are essentially exchanging Bitcoins for goods or services. You may have gained in doing so, and therefore it has to be reported. Say you bought 1 BTC for $10. Now say that Bitcoin is worth $100 and you buy a $100 gift card. You got a $100 gift card for only $10. That $90 is gains and taxable."
That's ridiculous. Although threatening to enforce this by the IRS would be a good way for the government to try to kill bitcoins and other crypto's.
That is a correct interpretation though. Basis is $10 and you essentially sold it for cash for $100.
There is going to be so so much tax evasion even from honest folk. Besides the buyer and seller, who else knows the transaction even took place? Isn't privacy one of the attractive features of Bitcoin/cryptos?
Government is trying to scare the average joe. The figure they gave out about how many people reported taxes in the past is a straight out lie, quite a few tax firms on various podcasts have all said the amount of clients they help prepare at each firm were more than the figure the IRS gave in its press release or the coinbase lawsuit saga.
You are quite right. Take for instance state sales taxes. States with both income and sales taxes will ask you to report out of state purchases and pay the sales taxes on these. I doubt many people do.
I suspect that's true. There hasn't been a practical way for the IRS to track bitcoin type transactions in the past. But the beginning of the issuance of 1099-K's by exchanges will change that.
I think the ideal scenario would be to buy your BTC in a US exchange (such as coinbase), then transfer it to an offshore exchange like Binance. Then the IRS won't have any clue about your gains. They would only know what you exchange back to fiat (or whatever you exchanged in a US-based exchange).
In an IRS audit they are going to tell you to justify your bank deposits. They will also ask for your Binance records.
I think they are gearing up to rip some new azzs. They were not impressed only 800 people bothered filing the Form 8949 last year.
Anyone who made a score over $50k would need to be super careful. The IRS has hired firms to gather intel so they may know more than you think.
Sure, the IRS is only going to know when you exchange back to fiat. They won't even know that you have a Binance account.
I like the train of thought. The next issue would be... what do we do to change it back to USD currency without being exposed?
Well, in an audit they are going to ask you to list your foreign exchanges. If you list: "None", and they have some intel, you are going to need a good criminal attorney. The blockchain in no way is invisible. Just hard to connect the dots.
If you made a big score and are intent on avoiding taxes you need a realllllllly well thought out plan.
My angst about the IRS and Bitcoin continues. I think I understand what "should" be done. What I don't know is what I'm going to do. As I mentioned in post #40, I have about 3 alternatives. I've started on my taxes and will decide which approach seems reasonable to me.
Today I received an Email from Bitcoin.tax offering a webinar this Thursday about doing crypto taxes. I've signed up. I doubt that I'll learn anything that will make me happy, but what the heck. Here is the link:
https://zoom.us/webinar/register/291...Sx293ybxxeoL7g
BTW, one of the real issues that I have by playing by the rules (which I normally would want to do) is the following. Because of the big run up in crypto prices in 2017, I have large gains from trading in 2017. Since the the prices have come back to earth, I will likely incur large losses in 2018 even though I'll still be well ahead.
The IRS wants me to report the 2017 gains and pay taxes on them. But they will limit the amount of losses in 2018 to $3,000 and let me carry the additional losses forward to the following years (again with a yearly $3,000 limit). Unfortunately, I won't live long enough to get the losses back.
Localbitcoins.com. I think the States has some limits on daily btc transactions though.
If they have info from coinbase records (or other us sites sites with kyc) to match a name to a wallet then they can easily cross check someone's wallet against binance's wallet.
Most people dont think that far ahead, it usually goes in and out of the main wallet that you are using.
If you plan right, it would take a whole team of dedicated FBI agents to track you down (and a whole lotta luck on their part). Look at what it took to bring Silk Road down.
Here's a little bit of sanity: House Bill 3708 introduced by Rep. David Schweikert, R-AZ.
If I understand it right, purchases of under $600 (with crypto) will not be subject to gains tax and excluded from gross income. That would really be nice...let's hope it passes.
Really wish they would extend it to gross income - some sort of threshold. People that make under 20k/year (or 15k or 10k or whatever) on the sale of crypto - it would be nice if they didn't have the filing headache.... These are poverty levels of income especially when it is the sole source of income.. Fat chance on that, though. The IRS will always hold their hand out, palm up....
Here's my question regarding this stuff:
I bought into an online sportsbook for $2k via credit card. I turned that into 30k. I am now in the process of withdrawing the 30k using Bitcoin. Soon enough, I will have 30k worth of Bitcoin in Coinbase (let's assume the price is static) through 6 transactions (5k is the max withdrawal). 28k will have come from winnings and 2k from my initial deposit meaning at no point did I use my bank funds to purchase Bitcoin. How will this work when it comes to taxes? Is my basis price $0? Is all 30k technically a gain and therefore taxable?
At the end of the day, I want to do things fairly and the right way. I am just clueless as to what the right way is.
I am in no ways a tax accountant so just guessing here: I think you would have to declare 28k in gambling winnings and then the withdrawal of the BTC as capital gain as a separate event.
You transferred 28k of usd into bitcoin so that should count as a purchase of BTC at the price on that day for a total of 28k, then when you sell btc into cash then you count the price of the day you sold it and subtract to pay for the capital gain.
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