Hello,
I have been investigating whether transfering bitcoin from coinbase account to a hardware wallet is a taxable event that should be reported to the IRS, but because it is not a disposition of bitcoin no tax is due. I get the fact that no tax is owed. However, I am very unclear if the transfer itself should be reported to the IRS as an event. This is important as failure to report can result in massive penalties in the future. It also very inconvenient as all transfer in and out wallets in your control would have to be reported to the IRS.
The best I have been able to find is that nothing should be reported to this agency (by far the preferred solution), but there should be record keeping in case of an audit later on. I am not sure though, there is no clear guideline on this.
This also raises the question that coinbase reports transfers as sales and will likely report this to the IRS. What can be done to indicate this was not a sale?
Appreciate your input if you have it.
Thank you,
Topic: Specific Bitcoin Tax Question involving transfers (Read 132 times)
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