Topic: CashApp Taxes (Read 316 times)
How would they list proceeds on a 1099 if you just transfer the coins to another wallet? Seems like they would not have enough information to generate a form. Their support is non existent, so I am pretty much regretting using them. They do make it relatively easy to get bitcoin though and don't have massive fees. As least coinbase makes it pretty clear how they handle reporting with 1099k being sent only to those meeting certain thresholds.
Happen to be anyone on this site who has used CashApp for Bitcoin purchases and can shed some light on the process they use to generate 1099-b forms? There site says they will issue a 1099-b for anyone who "sells" coin on their app, but I have also seen they generate a form for anyone who just buys it and then transfers it to another wallet. Seems very confusing to me, so any help would be appreciated.
I'm not sure about this, but they may also send a 1099-B if you're holding bitcoins on Cash App on 12/31 of the tax year. Their FAQ is pretty vague, but if you sold through Cash App, you'll definitely get one. We know that for sure.
I would guess that if you did all your buying and selling through Cash App without withdrawing bitcoins, that the cost basis -- if listed at all -- would be more or less correct based on FIFO. Otherwise it will probably be wrong.
You should be tracking all of your activity separately so you can correctly calculate your cost basis and associated gains and losses. If your basis differs from the 1099-B Cash App generates, this is how to deal with it:
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There are two options, which depend on if your sale was of a covered or noncovered security. If it's covered, then the basis on your 1099-B is reported to the IRS. Report the sale on the 8949 under the correct box, using the proceeds and basis on the 1099-B. Then adjust the gain/loss to what it should be through a code B adjustment. On the other hand, if it's noncovered, the basis is not reported. Report the sale on the 8949, using the proceeds on your 1099-B and your correct basis. No adjustment required in this case.
I would think Bitcoin is treated as a noncovered security anyway, so they probably aren't reporting cost basis to the IRS at all. It's more of a heads up to the IRS that you made sales on particular dates that totaled particular net proceeds, so make sure your Form 8949 reflects all your Cash App activity!
Happen to be anyone on this site who has used CashApp for Bitcoin purchases and can shed some light on the process they use to generate 1099-b forms? There site says they will issue a 1099-b for anyone who "sells" coin on their app, but I have also seen they generate a form for anyone who just buys it and then transfers it to another wallet. Seems very confusing to me, so any help would be appreciated.
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