I purchase Bitcoin through CashApp, which is required to file a copy of 1099b. I’ve purchased roughly $1,000 worth, and all of that was directly sent to another user’s Bitcoin wallet. Out of the $1,000 I’ve purchased, I’ve only cashed out $20.
My question is, would my “Cost or Other Basis” be $980 and my capital gain $20?
Bit confused on the whole thing, as I’m new to Bitcoin and taxes.
it would seem your sales price is $20 and your cost basis is $1,000 times whatever fraction you cash in. you could have a gain or loss. the 1099-B should report your cost basis
According to that article, I only need to report “investment” if I cashed out. Out of the $1,000 I bought, only $20 was cashed out, so that should be what my capital gain/loss is based on, as well as cost basis?