Coinbase says new U.S. tax-reporting rules for crypto are cluttered, confusing
Summary
Coinbase's tax experts caution that the IRS's 1099-DA tax form for reporting digital asset gains may lead to significant over-reporting issues, raising concerns for taxpayers navigating the complexities of cryptocurrency taxation.
Key Insights
What does the new IRS Form 1099-DA report, and why might it cause over-reporting of taxes?
The Form 1099-DA reports gross proceeds from crypto sales and disposals to the IRS, but does not calculate actual capital gains or losses since exchanges like Coinbase may lack the full cost basis, especially for transferred assets, potentially leading taxpayers to over-report gains if they rely solely on the form.
Do I need to report crypto transactions on my taxes even if I don't receive a 1099-DA from Coinbase?
Yes, all taxable crypto events must be reported regardless of receiving a form; the $600 threshold for 1099-MISC only triggers issuance, not your reporting duty, and activities like DeFi or Coinbase Wallet require manual tracking.