Jan 27, 2019 15:30 UTC
Mar 3, 2019 at 22:43 UTC
Gemini And Coinbase Exchanges To Report Transaction Details To Tax Authority IRS
Two top US-based cryptocurrency exchanges, namely, Gemini and Coinbase, are reportedly starting to file tax reports to the IRS or the Internal Revenue service whenever their customers buy cryptocurrencies.
Another cryptocurrency exchange Kraken has said that they will not be informing the IRS authorities in the same way. In any case, the users are themselves responsibility for deciding if their crypto trades are supposed to be taxable or not.
Reportedly, it seems that the Coinbase Exchange and Gemini Exchange will issue a 1099-K form to some of their customers. The issuance of the forms to the customers will be entirely dependent on the nature of their transactions. In terms of the criteria that will lead the exchanges to report a customer’s transactions to the IRS will including crossing a dollar value of $20,000 or doing over 200 transactions in total.
In such a situation, the IRS authorities will be kept completely in the loop regarding the users’ crypto transactions. What one must take note of is the fact that customers who had bought or sold cryptocurrencies from these exchanges last year, in 2018, will also have their transaction details communicated to the IRS.
If crypto holdings were converted to fiat currencies owing to losses before the end of last year, is likely to result in a tax cut of about $3000. Of course, those who had held their crypto assets without buying or selling throughout 2018, are not going to be among the ones receiving the form 1099-K.
Kraken is an exchange that has specifically denied that they will be submitting tax documents to the IRS. After crypto influencer Crypto Tax Girl posted a tweet saying that this crypto exchange will be reporting to the IRS, Kraken took to Reddit to vehemently deny that they will be filing reports.
Kraken has clarified that it will not be submitting their customers’ account details although their customers will have the option of transmitting their own respective trading records in case they want to make a tax filing. They stated that:
“WE DO NOT SEND OUT END OF THE YEAR STATEMENTS AND WE ARE NOT RESPONSIBLE FOR DETERMINING WHETHER TAXES APPLY TO YOUR TRADES OR FOR COLLECTING OR REPORTING”
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