I received a 1099-K from Coinbase for my cryptocurrency account. My 1099-K says "Payment Card and Third Party Network Transactions". How should I file this?
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New Member

I received a 1099-K from Coinbase for my cryptocurrency account. My 1099-K says "Payment Card and Third Party Network Transactions". How should I file this?

 
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Expert Alumni

I received a 1099-K from Coinbase for my cryptocurrency account. My 1099-K says "Payment Card and Third Party Network Transactions". How should I file this?

The Form 1099K is not an "entry" document.  For your cryptocurrency account, you enter your transactions that were sold.  It is treated like an investment sale for tax purposes, and should be divided between long term and short term transactions. You will need the date purchased, purchase price, date sold, and selling price.

Cryptocurrency is treated like any other asset, stock or collectible.  There are no tax issues when buying.  When you sell, you have either a capital gain or loss, that is taxed as regular income (short term gain, held one year or less) or lower long term capital gains rates (held more than 1 year.)  Because cryptocurrency exchanges are not currently required to issue 1099-B statements like a stock broker does, you will need your own accurate records of your purchases and sales.  If you are audited and can't prove the price you paid, the IRS is likely to declare the entire amount to be a taxable.

Please use these steps in TurboTax (online or desktop):

  1. Select the Federal tab
  2. Select Wages and Income 
  3. Select Investment Income
  4. You'll list each trade/sale in the Stocks, Mutual funds, Bonds, Other interview 
  5. When asked "Did you get a 1099-B or a brokerage statement for these sales?" select No 
  6. When asked to Choose the type of investment you sold select Everything else
  7. Translate proceeds of each sale into US dollars at the time of the sale
  8. Repeat for each gain (you can consolidate for one short term sale and, if applicable, one long term sale).

For more information about cryptocurrency see below.


New Member

I received a 1099-K from Coinbase for my cryptocurrency account. My 1099-K says "Payment Card and Third Party Network Transactions". How should I file this?

What is I received a 1099k and I never sold anything. How do I inform the IRS of no sales?
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