just got a 1099-b; I am concerned

[DISTROYA]

"proceeds from broker and barter exchange transactions"
its in the high 5 digits...
Not very tax savvy and this is first year up in sports, but nowhere near the amount it says here.
Does this mean have to pay taxes from amount shown when form is submitted to accountant?
These are all BTC from withdrawals, but how the hell could one show all the deposits that were made to the books via BTC to offset? It seems like I won high 5 digits when most of it is just the BTC payouts from blockchain to the brokerage. Shit, how deep in trouble/potential problem is this here?
Would appreciate any advice private or not.
I dont know what to do.
Accountant is a friend of family dont wanna disclose nature either.

[DISTROYA]

non-covered security is checkmarked on the form,
however, "basis reported to IRS" isnt checked, is that good news?
Actually it says net proceeds reported, damn. Im lost as to what to do.

[Ebumdude]

I will come out and say that I am not an accountant and I cannot give you advice. However I do have a question.

Youve done nothing wrong, why are you ashamed to show the family/friend accountant?

[Ebumdude]

Google; Cost basis on undetermined transactions (transactions where the cost basis is notknown on either short-term or long-term transactions) are not reported to the IRS. The IRS expanded Form 1099-B to include new boxes in order to accommodate cost basis reporting on covered shares.

Any short-term gains from your 1099-B information will be included in your regular income on your tax return. Ultimately, you'll pay tax on it as if it were wages or other ordinary income

https://ttlc.intuit.com/questions/36...ted-to-the-irs

[eaglesfan371]

Ah yes, one of the first unsuspecting people to receive one. If you netted 20k in withdrawals last year, that will trigger it.

I would likely seek out a tax professional because a 1099-b is going to be hard to write off. You are likely going to get audited so I would reach out to any casinos you play at, online sites etc and collect win/loss statements. You can say your expenses were the full amount earned but realize you will likely trigger an audit.

Use multiple bitcoin exchanges next year to ensure under 20k total from any exchange.

For example, I keep receipts of all bitcoin purchases i make now. Start keeping receipts. While sports betting is becoming legal, so are the potential tax forms.

[DISTROYA]

ty guys, damn I m so fcuked.

[Auto Donk]

just always write in a number about 300-500 bucks higher in the blank for "gambling losses".....

do the math, and your problem is solved

[DISTROYA]

Problem is have High 5 digits of bitcoin sales... How could cost of the bitcoins be shown when they are coming from blockchain via gambling withdrawals to the brokerage?

[thechaoz]

"proceeds from broker and barter exchange transactions"
its in the high 5 digits...
Not very tax savvy and this is first year up in sports, but nowhere near the amount it says here.
Does this mean have to pay taxes from amount shown when form is submitted to accountant?
These are all BTC from withdrawals, but how the hell could one show all the deposits that were made to the books via BTC to offset? It seems like I won high 5 digits when most of it is just the BTC payouts from blockchain to the brokerage. Shit, how deep in trouble/potential problem is this here?
Would appreciate any advice private or not.
I dont know what to do.
Accountant is a friend of family dont wanna disclose nature either.

Who sent you this form?

[eaglesfan371]

just always write in a number about 300-500 bucks higher in the blank for "gambling losses".....

do the math, and your problem is solved

Problem is, 1099-b is not for gambling. It is broker transactions. They know that majority of bitcoin users will have a hard time showing receipts and documentation for initial investments, to calculate actual taxable income. This is going to lead to a very high audit rate for such 1099s.

[eaglesfan371]

Who sent you this form?

Any of the big exchanges, coinbase, gemini, etc will issue a 1099-b if the net sales to you is $20,000 or more in a calendar year. For exchange if you buy $5000 in bitcoin from coinbase, and sell $25,000 worth, you will get triggered.

If you bought all your btc off localbitcoins from some average joe for $40k total, and then withdrew bitcoin from sportsbook and sold immediately on licensed exchange for 20k to your bank over the year, a 20k gambling loss to you, but guess what a 1099-b will be triggered and you now have to show receipts and documentation for at least 20k of those localbitcoin cash deposits, bitcoin atm purchases, etc.

[thechaoz]

Any of the big exchanges, coinbase, gemini, etc will issue a 1099-b if the net sales to you is $20,000 or more in a calendar year. For exchange if you buy $5000 in bitcoin from coinbase, and sell $25,000 worth, you will get triggered.

If you bought all your btc off localbitcoins from some average joe for $40k total, and then withdrew bitcoin from sportsbook and sold immediately on licensed exchange for 20k to your bank over the year, a 20k gambling loss to you, but guess what a 1099-b will be triggered and you now have to show receipts and documentation for at least 20k of those localbitcoin cash deposits, bitcoin atm purchases, etc.

lol completetly anonymous huh? This is why I use Monero.

Thanks for the info. Not you of course, but people seem to forget the orignal intent of btc was to be total anonymous internet transactions.

Now people are getting 1099's? penetrate all that.

[dlowilly]

My initial reaction would be claim the proceeds on schedule D as "gross proceeds from gambling" and then claim the losses as an itemized deduction just like you would against a w-2g from a casino. I guess you could treat it like sale of stock and subtract your losses as the basis in those proceeds but it would be safer to go the itemized deduction route.

[pablo222]

I had a couple questions if anyone can help. Does the 20k 1099 happen at blockchain.com? If so what are the best alternatives?
I have been reading conflicting information.

[DISTROYA]

Itbit sent it...thechaoz

[BigJay]

I remember Gemini telling me the 20ktax thing when I first signed up and they answered emails.

Shouldn’t you be able to add find and add up deposits to offset it? If not it will be charged as capital gains tax I believe. You could get taxed between 20-25 percent of the 1099b.

[thechaoz]

So if you're paying taxes on btc, that's the opposite of anonymous. Why even use it then?

Might as well deposit from your bank account LoL

[IAG]

lol completetly anonymous huh? This is why I use Monero.

Thanks for the info. Not you of course, but people seem to forget the orignal intent of btc was to be total anonymous internet transactions.

Now people are getting 1099's? penetrate all that.

How do you obtain and where do you sell your Monero? The “problem” isn’t with BTC per se, it’s with the reporting exchanges.

[Ebumdude]

So if you're paying taxes on btc, that's the opposite of anonymous. Why even use it then?

Might as well deposit from your bank account LoL

BTC isn’t anonymous. Hence the silkroad shutdown. All wallets are public info and traceable.

[DISTROYA]

well thanks for all your input and feedback....shit at this rate better to just take check payouts under 10k.
i spoke to accountant he said just give him all the dates of the BTC purchases (incomings) to offset, and wasnt too
concerned about audits, said unlikely. Guess will go that route and pray.
Hope this thread helps people out. If someone can tell me a few brokerages so i can keep them all under 20k, gemini was mentioned, thank you.

[VeggieDog]

Don't lie on your tax return.

[DISTROYA]

not lying, i didnt make the amount they show; actually lost money from the fluctuating BTC rates by the time received the withdrawals, converted to dollars and sold on itbit.

[IAG]

Which exchange sent you this form? You will be paying capital gains on any profit made from the time you bought the BTC (with each transaction being a taxable event) until any conversion or sale What you made after the money was converted at book won’t matter except when claiming gambling wins/losses.

Example... On Monday you bought BTC for $1000. On Wednesday you sent that one bitcoin to the book, but the price had increased so they gave you credit for $2000. Therefore you have a capital gain of $1000. What happens at the book after that doesn’t matter....except for gambling income purposes.

lets say you win $5000 BTC at book and send to CB to sell. The gain or loss will be on the price of BTC at time you acquired BTC from your USD winnings to time you sold. If all thingsare even no taxable gain or loss
but you still have to track it.

I guess I am assuming you made your book deposits in bitcoin also? If so was BTC bought at same exchange? Or did you never buy BTC, just used other methods to deposit and then cashed out BTC?

[Optional]

well thanks for all your input and feedback....shit at this rate better to just take check payouts under 10k.
i spoke to accountant he said just give him all the dates of the BTC purchases (incomings) to offset, and wasnt too
concerned about audits, said unlikely. Guess will go that route and pray.
Hope this thread helps people out. If someone can tell me a few brokerages so i can keep them all under 20k, gemini was mentioned, thank you.

Smart move getting a professional onto it.

It would be great if you can let us know the end result.


the Cash App by Square Inc on your phone is a good way to buy it.

the BitPay card is a great way to sell it.

Coinbase.com and Gemini.com are like retail exchangers for both ways.

Kraken is another option.

[DISTROYA]

did my calculations like the accountant said and in 2018 actually lost a grand total from the time the bitcoin withdrawals were sent to blockchain and then deposited into the itbit account...and then sold to convert to dollars.
I'm very paranoid so most of the time I would sell the btc as soon as I received it into the itbit account.
Couple times I left it a few days then sold.

[TheMoneyShot]

Itbit gave you the 1099? interesting.....

Well... guess we won't be using them.

[TheMoneyShot]

the BitPay card is a great way to sell it.

Smartest move when you want to get rid of your BTC.....

Don't sell it. Just move it to the card.... then spend with it.

It's the only way.

[DISTROYA]

So you can receive bitcoin on blockchain and then transfer it to a bit pay card and use it like a credit card?
That sounds great my only concern is does it remain in bit coin or is it's converted to dollar amounts on the card based on the daily bit coin price

[DISTROYA]

Well the website says load your card with dollars using your bitcoin wallet so I guess you can send it in dollar form through blockchain that's fantastic

[mngambler]

Problem is, 1099-b is not for gambling. It is broker transactions. They know that majority of bitcoin users will have a hard time showing receipts and documentation for initial investments, to calculate actual taxable income. This is going to lead to a very high audit rate for such 1099s.

for unusually large amounts I would agree, but lets be honest the IRS is incompetent, they audit less than 1% in the last 2 years and most of those were morons doing obvious tax evasion "last year I donated $500 to Charity" but this year I donated $30,000 LOL...just pay the taxes and be done with it but just because you were 1099'd I wouldn't automatically assume you will be audited, that's just pure foolishness

[chico2663]

if it is gains from gambling i would try to find some race track losses eg tickets. Or find some lottery losses and deduct from that

[bonzaii]

Bitcoin was never intended to be anonymous. There is no "Satoshi Nakamoto." Bitcoin was a project that was developed back in the mid 90s by the security agencies in the US. It's all a ploy to replace the fiat dollar with a digital currency while making it look like it was some random guy not connected to the power players around the world.

[Ebumdude]

Bitcoin was never intended to be anonymous. There is no "Satoshi Nakamoto." Bitcoin was a project that was developed back in the mid 90s by the security agencies in the US. It's all a ploy to replace the fiat dollar with a digital currency while making it look like it was some random guy not connected to the power players around the world.

This guy gets it.

[WvGambler]

If you see a man sized owl, in a tree outside your house, looking in the window.....it’s not an owl. You’re about to be raided.

[thechaoz]

BTC isn’t anonymous. Hence the silkroad shutdown. All wallets are public info and traceable.

Monero ftw