Topic: Does Bittrex, Coinbase/Gdax, Gemini report to the IRS? (Read 2674 times)

Most out there are website based which means scaredy cat owners who may well have logs of every trade they're willing to hand over. The addresses you use can be traced elsewhere so it's not going to make much difference in most cases.

i assume the coinbase summons was one source of the taxpayer data in the earlier rounds of letters. another obvious source would be the ongoing 1099-Ks exchanges like coinbase, gemini, and kraken have been sending since 2017 or 2018. the article mentions subpoenas of non-USA exchanges like bitstamp---yikes! i wonder if that extends to the shiftier exchanges like binance, bitmex, kucoin, etc and to what extent they are complying.

i really wonder what kind of volume/activity would warrant an IRS subpoena, american exchange or otherwise. any idea? i assume exchanges are not obligated to tell you when it happens. this type of stuff sends shivers down my spine!

Anytime you provide KYC, you should expect that it may be used against you, and you shouldn't be surprised if that happens. No special announcements about 'deals' have to be made (unless it's legally mandated).

In 2019, the IRS sent the famous three letters to US tax payers. It's unclear how they got the data, but they did issue a summons to Coinbase for customers with transactions past a threshold (200tx, $20k total... tho that's still vague, $20k / tx? $20k withdrawn? $20k transacted total is very very little)

Well now in 2020 IRS sent another set of similar letters yesterday, and it's still unclear how they got the data, but given that they signed a deal with Coinbase Analytics in July, it's not hard to guess.

The Australian tax office also sent a bunch of letters in March 2020.

Time to switch to DEXes, though I don't know any that support Bitcoin.

Gemini doesn't send out the 1099-B but they just sent me a 1099-K today.  They will send it to everyone who has $20,000 in transactions or 200 transactions on the account which isn't that much for cryptocurrencies.  

https://gemini24.zendesk.com/hc/en-us/articles/360000032643-Will-Gemini-send-out-1099-B-tax-reporting-


Will Gemini send out 1099-B tax reporting?

Currently, Gemini is not required to issue Forms 1099-B because bitcoin and ether sales appear to be regarded as sales of personal property under current IRS guidance. Forms 1099-B are not required to be issued for sales of personal property, and therefore, while we are still evaluating this issue, we do not believe that Gemini has a filing requirement at this time.

With that said, our account reports do provide information related to 3 of the 4 pieces of information related to determining gain/loss of your bitcoin or ether activity on Gemini:

Date acquired (if your bitcoin or ether were purchased on Gemini)
Date sold
Proceeds
You can access your account report by following the two steps below:

1) Click the “View All Transaction History” button located at the bottom of the Dashboard

2) Click the “Download History (xlsx)” button. This will prompt the account report to download on to your device.

Please note that we do not have any way of knowing the cost basis for bitcoin or ether deposited into your account (one of the necessary pieces of information to complete a Form 1099-B). As a result, we recommend that for tax preparation, especially related to any sale of bitcoin or ether on Gemini that were acquired elsewhere, you consult with your personal tax advisor.

Let's clear up coinbase's policy a little.

"Will Coinbase send me a 1099 or similar form?

For U.S. users only, Coinbase provides Forms 1099-K to certain business users and GDAX users that have received at least $20,000 cash for sales of cryptocurrency related to at least 200 transactions in a calendar year."

Certain business users and GDAX users that have received at least $20,000 cash for sales related to at least 200 transactions.  

So that settles that, most people will NOT be receiving a 1099 from Coinbase.

"Does Coinbase provide other tax reporting information?

You should refer to your account transaction history for records to compute your gains and losses over a given period. As a convenience to our customers, Coinbase also provides a Cost Basis for Taxes report (in beta) which will help with filing your taxes."

This is not the same as a 1099, this will help you self-report, but they will NOT be sending the IRS anything.


Edit:

I would like to add, that doesn't mean in 3 years the IRS won't come after CB again and subpoena all their records and then start chasing down everyone that didn't file taxes in 2017/2018/2019.  The IRS can audit you for 3 years, or up to 6 if they believe there's criminal activity, which tax evasion would fall under.

I read it was 20K$ transaction. So no matter profits or loses.

"the exchange that bought, sold, sent or received sums of $20,000 and higher between 2013 and 2015."
https://www.coindesk.com/coinbase-ordered-to-hand-irs-data-on-over-14000-users/

Gemini should follow Coinbase example, they try to be really law compliant and institutional oriented.

Going to be treated just like paypal transactions. Friends and family payments will only get you so far.  I am letting my CPA deal with this one.

I am not sure if its profits, but I just logged into Coinbase and a popup announcement came up "don't forget to pay your taxes". Then when you click on it, it goes to a page with their tax policy, and it clearly states the $20,000 figure that it will be reported to the IRS. I can dig up the link for you later but take my word for it. I am in the 4 figures of trades/profits anyway. I made a lot more gains on altcoins, like way more than anything on Coinbase/GDAX.

Anyone else have any insight on this?

You sure thats 20k in profits?  How would they even know the 20k you are cashing out is profits?  Or you mean if you cash out 20k using coinbase?  Someone that is cashing out 20k from coinbase could easily be down money on other exchanges etc.  So how would they base the 20k on?

Bump

Has anyone heard any development in this? for GEMINI specifically.

My understanding is, Coinbase sends a 1099 forum for profits in excess of $20,000. What about Gemini?

I may be not sure but i do believe that bittrex is probably not reporting to IRS . There are million of investors and traders which are connected to bitterex inorder to do some off-the shore , off-the limits trading . That would not be possible if , bittrex was reporting to IRS .
This might be a genuine fact that coinbase is pretty much questioned every day to the world banks and IRS but i haven't heard of the reports where the bittrex , gdax bent the knee . Since , the intervention of different governments , many countries are excluded from participating in on different coin base activities . But it is quite difficult to analyze if they are using it or not . If it was known , then bittrex and gdax might not get questioned from different platforms.                                       

You should always assume that you have been reported, better to be safe than sorry.

They do not, but they may have to turn over your data if law enforcement asks for it. Pay your taxes.

We might not have the evidence to support this, but every actions seems to support that fact and I feel that there is no way they wont be supplying information to the IRS in other to stay in business. That is more the reason why a lot of service providers are excluding people from that part of the world because if it had been a free market without any government activities sinking down their throat, there is nothing stopping them from expanding market to a population of about 300 million citizens.

Coinbase in the past released a statement to counter the release of information, but I doubt if behind the scene, they are not doing otherwise all that will be needed will only be a warrant from a judge that is known to support the cause of the IRS or other regulatory authority. Hopefully, peer to peer platforms can be allowed to operate, that is when we can see a situation where the leaking of information will be reduced to a large extent.

I am not sure if the exchanges to report but I do know That living in Washington State I have to pay taxes on my BTC as property tax if I mine and pay taxes for what they were worth at point of sale. its on the Washington state revenue website.ask your local jurisdiction about btc regulations?

I am using Bittrex for my limited trading activities but since I am just a small fry in a big pond maybe they are not noticing me at all. I am not also based in USA which they can easily verify with the documents I uploaded to the site so that probably another reason why nobody disturbed me with any tax-related communications.

I understand your concern because these exchanges and wallet service providers are based in USA and we know how strict the IRS when it comes to implementing their tax codes -- professional in doing their jobs they don't care whoever you are (or so I hope!). In fact, that news that the IRS was asking for the database from Coinbase related to Bitcoin transactions became a hotly debated issue months ago. And there are really some cases filed by IRS and other agencies in connection with trading and/or selling Bitcoin to fiat money. Being careful here is an understatement.

i don't believe any of the exchanges send 1099s to traders at this time. i believe that USD-facing exchanges and especially brokers will need to provide 1099s in years to come, but nobody is doing it yet.

coinbase provides a "cost basis for taxes" report which summarizes your USD net profit/loss. this will assist in preparing your taxes, but it's not an official form and they do not report to the IRS. that's one of the reasons why the IRS is hounding them so hard; there is little to no reporting from coinbase at all:


i'm not familiar with gemini (they wouldn't accept my ID so i can't trade there), but i believe they deal with this similarly. bittrex definitely doesn't report to the IRS, either.

Any traders or people who just make a few trades here can tell me if they received this and if so from which site?

Can someone here tell me if they do or not?  Want to make sure of this before i do trading.

Someone a while back told me they used coinbase and did some trading but they got either a 1099 or w2 for like 100k when his profit was around 20k.  He said coinbase counted transfer from his wallet to coinbase and vice versa as income.  He said he had to contact coinbase on this issue.


Does anyone know if coinbase, gdax, bittrex and those exchanges report to the IRS?  I recall it was mentioned you needed to have 20k in transactions minimum and also believe it needed to be at least 100 transaction... i believe it has to fit both criteria in order to receive a 1099 from coinbase.  Does anyone know if this is true or not?  And does that apply to now?  The thing is if you are cashing out a lot of money from btc, well say you did 30k in cashouts.  The thing though is your profit could only be 5k for example or even 1k etc.  If thats the case, would coinbase or those exchange send you a 1099 or report to the IRS that you made 30k in cashout to your bank account?  Because it seem like if thats the case, everyones 1099 would be incorrect since ppl buy bitcoin or get bitcoin and then sell it?


Also can someone here confirm coinbase is the same as gdax?  Or is it a bit different?  Does anyone know about gemini and bittrex?  I am planning to trade altcoins on bittrex and then cashout any profit i have if any using gemini to my bank account.  Thus if it show that im transferring btc from bittrex with other altcoins, would they send that to the IRS?  The thing is if you record your profit/losses correctly... isn't there still an issue because the 1099 or whatnot from them will show your total cashouts as oppose to your actual profit?  Because i know if you get any w2 from the casino etc... that is what you need to put down and if its not the same number as your w2s or 1099s, then well you will get looked at and need to explain why the numbers are different.  But would this issue arise when trading altcoins and bitcoin etc on bittrex and then cashing out to bank account with gdax or gemini?  Because imagine you have a few thousand in profit only.  But you cashed out like mid 5 figures to your bank account.  But you do a lot of buy and sells.  Would there be issues with this since they might look at your total cashouts as your profit? 


I would like to know from people who used bittrex, coinbase/gdax and gemini on this issue.  Have you ever received any documents from them?  And if so, did you traded a lot in terms of money?  I assume people that do a few transactions for tiny amounts probably do not get any of this?


Thanks.