Coinbase reports your transactions to the IRS through Form 1099-K and Form 1099-B, depending on the type of activity and the dollar amounts involved
Coinbase is required by law to send transaction reports to the IRS when you buy, sell, or transfer cryptocurrency. The specific form depends on what you did: if you sold crypto for U.S. dollars or another currency, Coinbase reports it on Form 1099-B. If you received payments for goods or services in crypto, it reports on Form 1099-K. Coinbase sends these forms to the IRS and also mails or makes them available to you by January 31 of the following year.
The reporting threshold changed in 2024. Previously, Coinbase reported transactions over $20,000 in a calendar year. Starting in 2024, the threshold dropped to $5,000 for Form 1099-K (payment settlement entities), though Form 1099-B reporting has different rules based on gains and losses. Coinbase also reports information to the IRS about accounts that hold certain amounts, even if you did not sell anything that year.
Key Takeaways
- Coinbase sends Form 1099-B to the IRS when you sell cryptocurrency, and Form 1099-K when you receive crypto as payment for goods or services.
- You receive a copy of these forms by January 31, and the IRS receives its copy at the same time, so the IRS knows what Coinbase reported about you.
- Transfers between your own Coinbase accounts or to external wallets you own are not reported to the IRS, but sales and payments are.
- The IRS can see your Coinbase activity even if you do not receive a 1099 form, because Coinbase has reported information about your account to the agency.
What Coinbase reports and what it does not
Coinbase reports sales of cryptocurrency to dollars or other fiat currency on Form 1099-B. This includes selling Bitcoin for USD, trading one cryptocurrency for another (like Ethereum for Bitcoin), and converting crypto to stablecoins. The form shows the date of the sale, the amount of crypto sold, the proceeds, and your cost basis if Coinbase has that information.
Coinbase reports payments received in cryptocurrency on Form 1099-K. This applies if someone pays you in crypto for work, goods, or services. The threshold for 1099-K reporting is $5,000 in a calendar year as of 2024, though this threshold has changed in the past and may change again.
Coinbase does not report transfers between your own accounts within Coinbase, transfers to external wallets you control, or purchases of cryptocurrency with dollars (buying Bitcoin with USD, for example). Staking rewards, airdrops, and other forms of income may be reported differently depending on the circumstances — Coinbase may issue a 1099-MISC or other form for these, or may not report them at all if they fall below reporting thresholds.
When you receive your forms and what to do with them
Coinbase mails Form 1099-B and Form 1099-K to the address on file with your account by January 31 of the year following the transactions. You can also read these forms from your Coinbase account under the tax section, usually starting in late January. The IRS receives its copy of the form at the same time.
You must report the information from these forms on your federal tax return. Form 1099-B transactions go on Schedule D (capital gains and losses). Form 1099-K transactions go on Schedule 1 (other income) or Schedule C (if you are self-employed). If you received a 1099 form from Coinbase, you must include that income on your return even if you disagree with the amount reported — if you believe the form is wrong, you can file an amended return later with documentation showing the correct amount.
Keep records of all your Coinbase transactions, including the date, amount, price at the time, and what you did with the crypto. These records help you calculate your actual gain or loss, which may differ from what Coinbase reported. If you sold crypto at a loss, your records prove that loss to the IRS.
How the IRS matches Coinbase reports to your tax return
The IRS uses the 1099 forms Coinbase sends to match against what you report on your tax return. When you file, the IRS computer system compares the income and sales Coinbase reported to what you claimed. If you reported less income or gain than Coinbase reported, the IRS may send you a notice asking for the difference, plus penalties and interest.
The IRS also has access to Coinbase account information through other channels. In 2021, the IRS obtained records on Coinbase users with accounts over $20,000 through a court order. While that specific order has been resolved, the IRS continues to request information from cryptocurrency exchanges, and Coinbase complies with legal requests for account data.
If you did not receive a 1099 form from Coinbase but you had transactions, you still must report them on your tax return. The absence of a form does not mean the IRS does not know about the transactions — Coinbase may have reported account information to the IRS even if the dollar threshold for a 1099 was not met.
Differences between Form 1099-B and Form 1099-K
| Form | When Coinbase sends it | What it reports | Reporting threshold (2024) |
|---|---|---|---|
| Form 1099-B | Sales of crypto to fiat or trades between cryptocurrencies | Date sold, amount sold, proceeds, cost basis if available | Generally all sales, but thresholds vary by transaction type |
| Form 1099-K | Payments received in crypto for goods or services | Gross amount of payments received | $5,000 or more in a calendar year |
Form 1099-B is specific to investment transactions — it tracks what you sold and for how much. The form may include your cost basis (what you paid for the crypto originally), which helps calculate your gain or loss. If Coinbase does not have your cost basis information, the form will show that, and you will need to find that information yourself.
Form 1099-K is a payment settlement form. It reports gross payments received, not net profit. If you received $10,000 in crypto for services but your expenses were $8,000, the 1099-K still shows $10,000 as income. You report the expenses separately on your tax return to calculate your actual profit.
What happens if Coinbase reports something you think is wrong
If the 1099 form Coinbase sent shows an incorrect amount, date, or transaction, contact Coinbase's tax support team. Coinbase can issue a corrected form (Form 1099-B-X or 1099-K-X) if there was a genuine error. You will need to provide documentation — transaction records, screenshots, or other proof — showing what the correct information should be. Coinbase will then send the corrected form to you and the IRS.
If you believe Coinbase reported a transaction that should not have been reported (for example, a transfer between your own accounts that was mistakenly marked as a sale), gather your account records and contact Coinbase. Provide the transaction ID, date, and an explanation of why it should not have been reported. Coinbase may take time to investigate, so follow up if you do not hear back within a few weeks.
If you file your tax return before receiving a corrected form from Coinbase, report what you believe is correct on your return and keep documentation of your communication with Coinbase. If the IRS later questions the discrepancy, you can show that you reported the correct amount and that Coinbase issued an error.
Frequently Asked Questions
Does Coinbase report if I just hold crypto and do not sell?
Coinbase does not send a 1099 form if you only hold crypto without selling or receiving it as payment. However, the IRS may have other information about your account through reporting requirements or legal requests. Holding crypto is not a taxable event, so you do not owe tax on it unless you sell it or use it in a transaction.
What if I transferred my crypto from Coinbase to another exchange or wallet?
Transfers to external wallets or other exchanges are not reported to the IRS by Coinbase. A transfer is not a sale or taxable event. However, if you later sell that crypto on another platform, that platform may report it to the IRS, and you must report it on your tax return regardless.
Can I deduct losses from crypto sales on my taxes?
Yes. If you sold crypto at a loss, you can report that loss on Schedule D. Capital losses can offset capital gains, and up to $3,000 in net capital losses can offset other income in a single year. Losses beyond that carry forward to future years. Keep records of the sale date, amount, and price to prove the loss to the IRS.
What if I received crypto as a gift or airdrop?
Gifts of crypto are generally not reported by Coinbase and are not taxable to you when you receive them. Airdrops and other free crypto may be reported as income depending on the circumstances and the amount. Coinbase may issue a 1099-MISC for airdrops or other income. When you later sell gifted or airdropped crypto, that sale is taxable and must be reported.
Does Coinbase report staking rewards?
Coinbase may report staking rewards on a 1099-MISC or other form, or may not report them if they fall below thresholds. You are responsible for reporting staking income on your tax return regardless of whether you receive a form. The income is taxable in the year you received it, at the fair market value of the crypto on the date you received it.