Topic: Does Circle/Coinbase Give 1099s for Bitcoin Deposits/Withdraws and Tax Question? (Read 859 times)

The people at Localbitcions that don't want to deal with taxes/IRS might be just misinformed or don't want to deal with the calculations involved in figuring out the profit, or in most cases they don't want to be tracked. - Taxes are paid based on earnings / income, selling BTC for a profit is income (the profit part is) or the service rendered that the BTC is paid for.

Over $9,999.99 in cash deposit or withdrawals in one day at one bank requires them to file a report as $10,000 is considered not normal by the government. The bank, at the bank employees discretion can file a report on any amount that they deem suspicious, that could be literally any amount that is out of the normal for your account, including you making multiple smaller deposits in an attempt to get around the reporting rules.

Wire transfers, checks or other monetary instruments (not cash or cash like) do not fall under the reporting rules as the cash that initially created them would or should have "been checked".

This isn't a tax thing, its to fight money-laundering. As for taxes when you exchange from one currency to another it could be considered a gain or payment to you and in some cases the exchange will report that as earnings.

Just a little addition to the reporting*
A bank employee can file a report for any reason they deem suspicious and the banks anti money laundering department must investigate every report, it is also against the law for the employee to tell you if they are filing this report. So if you piss off that bank teller they could be smiling back at you filing a report on your account and having your past transactions looked into. At no time do you as a bank customer fill out the report and in most cases it's done right after you leave or if there is a line shortly after you leave.

Also contrary to some people's beliefs doing these deposits at multiple branches has no effect on if a report is filed, if the teller is properly trained they will in most cases look at previous deposits for that day at other branches and do some math.

TL;DR

Exactly how many questions did you just ask?

Are you really looking for someone to read that entire 7 paragraph post, remember all the questions, and answer them all?

In the future, you might want to try keeping your posts to just a couple of questions.  You'll probably find more people willing to take the time to answer when they don't have to spend a half hour reading, and writing.

Just curious on this.  I have done only 1 transaction where i sold bitcoin and it was for a very small 3 figure amount and this was with coinbase.  I heard there was a site called itBit that gives out 1099 to its customers.  Does anyone know the name of any other sites like that and exchanges that does?


I heard someone who withdrawn 70k total through circle and eventually got his account closed.  My circle withdraw limits are 3k a week though i only done 1 very small transaction.  Has anyone here received a 1099 from circle/coinbase or any similar exchange?  And if so, how much money did you withdraw to your bank?  Are these withdraws even reported to the IRS?  I assume even if you buy a lot but dont cash out... its sorta of similar but not like the same as withdraws.


I also hear lot of ppl sell their bitcoin via localbitcoin because they want the cash and dont want cash deposited in bank due to not wanting to pay taxes/IRS.  What i dont get here though is assuming you receive a bank transfer whether an online bank transfer or wire... isn't that the same thing since its cash going into your bank?  Or do cash deposits get looked at a lot more than checks/bank transfer and wires?  Im an online poker player and have my taxes filed but i rarely have ever made any cash deposit due to most of my money that i received was through boa online transfer.  So this is why most ppl dont want to cash out it themselves because its a paper trail?  I always did check and ach transfers back when i played online poker though max was 3k i believe at once due to the limits. 


So is that why some people actually prefer an online transfer, wire or even check because cash deposits gets scrutinized more?  For example if you sell like 3000 dollars worth of btc every month and someone else deposits it into your bank, doesn't that look a bit suspicious as oppose to if they were bank transfer or wire or check?  The other thing i know is ppl mention about structuring to avoid that 10k threshold.  First off... this is what confuses me.  Why would anyone want to even do that much money in 1 transaction?  For example, if i sell bitcoin for cash or whatever, the max i would do at once is 2 or 3k max.  And my reason is because in case i get scammed or something like that.  I think i recalled a read a story about a woman who owns a grocery store where she would have someone deposit the profits from it into the bank and always did under 10k transactions and it was mostly 3k-9k etc.  Obviously that looks like structuring but that person mentioned it was b/c bank said do it this way because you dont have to fill out paperwork everytime.  But that is sorta big as up to 9k.


But even if someone was doing 1k-5k deposits into the bank, how is that not considered normal?  I mean, do you really have to carry 10k or more cash into the bank?  Thats a lot of money.  You could even drop it on the floor because thats a lot of cash.  So basically the bank is like okay you have 9k cash and want to deposit in bank.  They want you to have 10k or more first?  What if the 9k is lost or stolen etc?  Makes zero sense how the government handles things like this.  I mean as long as the person pays taxes on it... why does it matter if a person is depositing 500 or 1000 at a time or 9000 or 20000 at a time.


Also curious but why do people just prefer cash as oppose to withdrawing via circle/coinbase?  I mean i certainly dont want a lot of cash somewhere where it could be lost or stolen etc unless you are putting all the cash in a safety deposit box.  Also you cant really do anything with the cash legally if you deposit it in the bank besides buy everyday things.


To me, i feel like when you withdraw via coinbase or circle, you dont have to worry about getting scammed at all since these are 2 legit exchanges.