1099-K Tax Forms

Please note that Coinbase cannot and does not provide tax advice, and we encourage you to consult a tax professional for your tax related questions. The intent of this article is not to provide tax advice, but rather to help our customers understand the 1099-K Form they received from us. Please consult with your accountant or tax advisor to ensure that you file and pay taxes correctly.  
 

What is a Form 1099-K?

Form 1099-K is an information return that is filed by certain third-party payment network providers with the IRS to improve voluntary tax compliance. The Form reports the aggregate, gross value of certain transactions for qualifying customers over a calendar year. The Form does not report your actual tax payment owed to the IRS.

Will I receive a 1099-K?

In the U.S., Coinbase files Form 1099-K for qualifying customers, as described below, that have engaged it at least 200 virtual currency sale transactions whose total value is equal to or greater than $20,000 during the calendar year.* You are a qualifying customer if you meet the transaction threshold requirements and:

  • Your account is for business use, as described below, or
  • Your GDAX sale volumes exceed the applicable thresholds. For GDAX users, a single “sale transaction” is effected each time you execute a virtual currency sale order on GDAX.

Coinbase will provide a copy of the 1099-K to you on or before January 31 for the prior calendar year. We will provide a separate copy to the IRS.

What if I am a resident of Massachusetts or Vermont?

If you are a business use or GDAX customer who resides in Massachusetts or Vermont, you will receive a Form 1099-K if the total value of your qualifying virtual currency sale transactions is equal to or greater than $600.

Coinbase will provide a copy of the 1099-K to you on or before January 31 for the prior calendar year. We will provide a separate copy with the Massachusetts and Vermont tax authorities but we will not provide other 1099 reporting information to the IRS, unless you qualify separately under the larger thresholds described above.

What are "Business Use" accounts?

"Business Use" means accepting virtual currency payments into your Coinbase Account in exchange for the provision of goods and/or services to your customers. We use the best data available to us to determine whether your account activity qualifies as Business Use, including but not limited to factors such as completion of a merchant profile or enabling merchant tools. Here are answers to frequent questions about qualifying Business Use:
 

  • Is receipt of mining proceeds considered a "Business Use?" No. In general, the receipt of virtual currency from mining activity does not meet the definition of Business Use, since it is not a payment you received from a customer for your provision of goods or services.
  • What about virtual currency I transfer in from another wallet I control? If you use multiple virtual currency wallets and transfer virtual currency into your Coinbase Account, that transfer should be excluded from the 1099-K form, since it is not a payment from your customer.

What information is reported on Form 1099-K?

Form 1099-K reports the gross proceeds from the sale of virtual currency sales transactions to the IRS. The volume reported on the Form does not represent gain or loss of virtual currency sales and it does not indicate your actual tax liability. As a convenience to our customers to help them compute cost basis in the virtual currency sales reported on their Form 1099-K, Coinbase provides a transaction reporting tool (in beta) that summarizes your virtual currency purchases and sales. Please note the Coinbase reporting tool is in beta and we expect to launch an improved version in February 2018. GDAX customers can find similar transaction information in their account transaction history.

How will I receive my Form 1099-K?

Coinbase uses a third party software system, Track1099.com, to process and send the completed 1099-K Forms to our customers. On or before January 31, you will receive an email from Track1099. This email will contain a secure link to view your 1099-K tax form.

Please note that you will be required to verify the last 4 digits of your SSN or EIN in order to access your 1099-K via this link. Upon receiving the 1099-K, we ask that you confirm the information contained is complete and accurate.

IMPORTANT: If your GDAX account is an institutional account or is operated on behalf of a business, please confirm that your 1099-K contains information for the business entity, rather than your personal information. If you are unable to access your 1099-K using your business EIN, we recommend inputting the SSN for the account signatory instead.

What if I receive a 1099-K and it has errors?

If you believe the information on your 1099-K Form is inaccurate, we ask that you please provide us with the updated information by contacting support+1099@coinbase.com.

 

*For customers residing in Vermont or Massachusetts, a different threshold applies.

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