Topic: Coinbase Sends Form W-9 to send Form 1099-K if 200+ Transactions Are $20K+ (Read 2900 times)

Thanks for sharing that.

Related interesting stuff: a crpyto audit letter from the IRS requesting a ridiculous number of things for 2017. Someone posted it on Reddit without any details (some claim the letter is fake). Would be interesting to know if the poster was caught by the 200tx/$20k threshold.

https://cryptotapas.com/wp-content/uploads/2020/02/Image-1-1.jpg

coinbase pro and coinbase prime customers receive a 1099-K if they pass the 200 transaction/$20k threshold. once you pass the threshold, they will place a restriction on your account and formally require you to complete a taxpayer ID request.

this is why i don't really trade on coinbase pro---i mainly only use them to cash out fiat money. staying under the 200 transaction threshold prevents any 1099 reporting. i do my day trading elsewhere, on exchanges that don't report to the IRS.

be mindful of this: a handful of states have much lower 1099 reporting thresholds, some as low as $600.

regular coinbase.com customers do not receive a 1099-K. they may receive a 1099-MISC if they receive $600 or more from "coinbase earn, staking rewards, and USDC rewards".

Old thread, but have there been any updates on this? Did Coinbase work with you in the end?


Do you get a Form 1099-K if you make 200+ transactions within Coinbase, including trading on Coinbase Pro? Doing day trading can easily add up transactions, but those won't be "into Coinbase". Also doing just 4 BTC day trades now will get you above $20k.

Good, I'm happy to hear that.

I've learned a lesson in all of this:

Coinbase has no clue [If you use other wallets, such as Trezor, Blockchain.info, etc...] to store bitcoin for safe keeping.  When we send funds into those wallets from our Coinbase wallet for cold storage and later transfer them back to our Coinbase wallet to cash out to our Checking account, they will assume those are payments even though they are not.  So, it's best to keep your transactions with Coinbase each year below 200 transactions to avoid having to ask them for a "corrected" Form 1099-K.  You don't get a form 1099-K unless you reach 200+ transactions coming into Coinbase AND those 200+ transactions add up to more than $20,000.00.

Coinbase, is doing all businesses a good service by enabling us to convert bitcoin to FIAT and deposit it into our checking accounts.  I appreciate them doing this for the bitcoin community.  I only hope they are cooperative in working through misunderstandings about transactions.  It's impossible for Coinbase to know if bitcoin transferred into your Coinbase wallet was transferred from another wallet under our own control or from someone else in the form of a payment.  This why it is best to avoid putting Coinbase in the position to TRY to determine what transactions were actual payments and which were simple transfers from a wallet under our own control back into our Coinbase Wallet to cash out into FIAT.

I should be fine as long as you have to have both the $20,000 as well as the transactions.  I'm sure I did reach the transactions.  Just not the money.

I spoke to the IRS earlier today.  They told me to provide my evidence to Coinbase via email and via USPS certified mail; to ask Coinbase to send a "corrected" form 1099-K and to keep copies of all correspondence with Coinbase.

So, we are about to see if Coinbase will cooperate with me and "correct" the form 1099K.  I purchased $35,000 worth of bitcoin via my Coinbase Wallet and USD transfers straight into Coinbase exchange during the month of December.  When I transferred $30,000 of that $35,000 back into my Coinbase wallet from the Coinbase Exchange, they reported it as a damn payment on the form 1099-K for the month of December.  THAT IS JUST FLAT OUT WRONG!  

They have me down as receiving over $87,000 in payments during 2015 when it should only be approximately $35,000 in payments.  They had also messed me up for the months of June, July, November and December.

I had purchased $16,000 worth of bitcoin via coinbase wallet through my bank in July and transferred it to the exchange.  I later transferred it out of the exchange back into my coinbase wallet then into another wallet for cold storage then back into coinbase wallet to withdraw and deposit back into my bank.  They counted all of those as damn payments.  Pisses me off.

We will see if they will be cooperative and "correct" this for me.  It may be a simple mistake.  It stresses me out to say the least.

Everyone will know soon enough if Coinbase wants the IRS to audit people [To no travail] or if they are willing to assist their customers with their mistakes made on important tax forms by correcting them.

I know one thing, if they are not cooperative, it shows they have no desire to have a good reputation with businesses like my own who wants to grow and do even more business with them.  If they do cooperate, I will be more than happy to take the time to explain how helpful they were in clearing up the misunderstanding.

I believe they are doing what they have to do in order to do business with banks.  Banks have to abide by these regulations and any other institution that acts like a bank and does business with banks on a large scale has to abide by the same regulations.  I simply ran into a regulation I was ignorant of with 200+ transactions totaling more than $20K must be reported with Form 1099-K.  If I had known this, I could have saved Coinbase and myself unnecessary paperwork.

My only concern is what transactions will be included in their total on Form 1099-K.  I'm concerned simple transfers back and forth from my everyday wallet to cold storage should not be added into the total on Form 1099-K.  I will find out soon enough I suppose...

As I've said before, it will occur.  Your evidence is only mounting up.

I say again, please stop posting here.  As your posts here [Or anywhere else for that matter] do not contribute anything positive to the forum or the bitcoin community.  If you cannot talk or debate respectfully, you are not welcome him, Sir.

You are not welcome here.

If you continue, you will receive a ban from a global moderator.  Not just your user name, but your IP address will be banned.

I can understand them having to report transactions "according to government regulations" since they do business like a bank and with banks that are also under the same regulations.  It's a way for the government to police [via the tax man] those who might commit fraud or evade taxes.

I do everything by the book.  I mark off all things that are allowed to be written off for tax purposes.  I invest what remains after expenses back into more mining rigs.  The ONLY payroll I have had is from the training part of my business when training telephone technicians.  There has been no payroll from bitcoin mining because I use ALL of it's profits to invest into more rigs or related hardware to grow my hash.

My only concern at this point in time is WHAT EXACTLY is Coinbase going to report on their 1099-K as transactions?  I more than likely will have to have several communications back and forth with them to PROVE that some transactions were simply transfers from cold storage address to coinbase or visa versa or from coinbase to another exchange after coinbase exchange went down to have the opportunity to sell my coin at another exchange in the event of a flash crash.  That occurred here recently when Coinbase Exchange went down.  This is what concerns me.

We will see how cooperative Coinbase is with me in future correspondence to clear up any discrepancies they may have on form 1099-K.

Agreed, form 1099 is for payments + the following:  

Box 1a. Gross Payment Card/Third Party Network Transactions

Enter in box 1a the gross amount of the total reportable payment card/third party network transactions for the calendar year. Gross amount means the total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts. The dollar amount of each transaction is determined on the date of the transaction.

Yes, I can see this for day trading.

My only concern for me as a miner and NOT day trading is what transactions they may THINK are payments to me or income that are in fact NOT income or payments to me.  They were simply nothing more than a transfer from like a checking account to a savings account and then back from a savings account (cold storage) to checking account.  I'm curious if they will have those included on the form 1099-K.

That I'm not sure of.  That's what I'm about to find out when I get form 1099-K sent to me.

I can understand Coinbase having to follow banking regulations made by the U.S. government if they are to do business with banks inside the U.S.  I have no issue with that.  The main purpose of this thread is to create a history of what I'm about to go through for others to learn from.

It may turn out that all will be fine and nothing to worry about.

My main concern is how in the world Coinbase will KNOW what transactions were payments and which one's were not?  I may end up having to go back and forth with them PROVING my wallets which funds were transferred to were for cold storage and I alone own and have access to them.  Because I would move funds in and out of the cold storage wallets all the time.

There were times I transferred to another exchange when Coinbase Exchange was down so I can be prepared to dump my coin in the event of a flash crash.  When the cause for concern for a flash crash was over and I transfer THE EXACT SAME AMOUNT back to my coinbase wallet, is that considered another transaction to report on form 1099K and looked at as a payment I received from someone else or what?

It is many things like this we are about to find out over the next several weeks as I straighten this out.

David

Really glad I saw this post as I'm starting to get close to that 200 transaction limit already for this year.  Is the 200 for all transactions or only incoming and trading ones? 

wtffffffffffffff get out of our livessss coin baseeeeeeeeeeeeeeeeeeeeeeeeeee uurrhghhhhhhhh!

I can understand them having to report transactions "according to government regulations" since they do business like a bank and with banks that are also under the same regulations.  It's a way for the government to police [via the tax man] those who might commit fraud or evade taxes.

I do everything by the book.  I mark off all things that are allowed to be written off for tax purposes.  I invest what remains after expenses back into more mining rigs.  The ONLY payroll I have had is from the training part of my business when training telephone technicians.  There has been no payroll from bitcoin mining because I use ALL of it's profits to invest into more rigs or related hardware to grow my hash.

My only concern at this point in time is WHAT EXACTLY is Coinbase going to report on their 1099-K as transactions?  I more than likely will have to have several communications back and forth with them to PROVE that some transactions were simply transfers from cold storage address to coinbase or visa versa or from coinbase to another exchange after coinbase exchange went down to have the opportunity to sell my coin at another exchange in the event of a flash crash.  That occurred here recently when Coinbase Exchange went down.  This is what concerns me.

We will see how cooperative Coinbase is with me in future correspondence to clear up any discrepancies they may have on form 1099-K.

Totally agree...