Bitcoin ATM and tax consequences

[curious4913]

I just found that local bitcoin ATM allow you to buy crypto up to 900$ per day by just giving name and phone number.

So without id or SSN - how would they report your cost basis to IRS? so in future when you want to sell and convert it back to cash - with some capital gain - how can you calculate capital gain? and pay taxes?

I am not sure why they would allow you to buy crypto without ID or ssn up to 900$

is there some kind of law that you can use cash up to 900$?

What am I missing here?

[Critter-3]

How does bitcoin ATM work?

A bitcoin ATM is a standalone device or kiosk that allows members of the public to buy or sell bitcoin or other cryptocurrencies for a terminal. Bitcoin ATMs are connected to the Internet and often utilize QR codes to send and receive tokens to users' digital wallets.

https://www.investopedia.com/terms/b/bitcoin-atm.asp

[fanfare]

It's your job to keep accurate record of the date and cost of all bitcoin purchases. 

Or any other securities from an agency that is not a broker.

Brokers are required to record your cost basis for securities that trade on an exchange.

[rjs]

If you do not have accurate records of the cost basis of your cryptocurrency (or any other assets), when you sell it the IRS will assume that the cost basis is zero. That means that the entire amount of the sale will be treated as taxable capital gain. You must keep good records of your purchases. If the ATM gives you a receipt of some sort, keep the receipt with your records.

[curious4913]

what if you receive crypto as gift from a relative or friend..

what is the cost basis for the recipient? is it the rate on which you receive the gift ?

does the donor need to pay tax of any sort?

[rjs]

The cost basis of a gift depends on the donor's cost basis. You have to find out from the donor. If the value on the date of the gift is more than the donor's basis, the recipient's basis is usually the same as the donor's basis. If the value is less than the donor's basis, or if the donor paid any gift tax (see below), it gets complicated. See the following topic in IRS Publication 551.

Property Received as a Gift

Someone who gives a gift does not have to pay any income tax. If the value of the gift on the date it is given is more than $15,000 (for 2021) the donor has to file a gift tax return. They will not have to pay any gift tax unless their total lifetime gifts exceed their lifetime exclusion, which is currently $11.7 million.