ByArthur Teller, CPA · Reviewed byZac McClure, MBAUpdated on December 18, 2023 · minute read
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Yes, Crypto.com does report certain transaction information to the IRS. Because it is a centralized exchange based in the US, it is required by law to report users’ activity with a Form 1099.
When an exchange like Crypto.com issues a Form 1099, they send one copy to the user and one copy to the IRS. If you receive a 1099 from Crypto.com or any exchange, you need to report crypto on your taxes.
For the 2023 tax year, Crypto.com sent Forms 1099-K to investors who made 200 or more transactions, the volume of which equaled $20,000 or more.
It also sent Forms 1099-MISC to U.S. traders who made more than $600 from staking or rewards.
The Biden administration is working on strengthening crypto exchange’s reporting requirements; beginning in 2022, the 1099-K threshold was lowered to trade volumes over $600 (before it was $20,000). Some states had already lowered this threshold. [1]
For more detailed information about crypto 1099s, check out our blog “What is a Crypto 1099?”
Frequently asked questions about Crypto.com reports to the IRS
Here are answers to frequently asked questions about whether Crypto.com reports to the IRS and how taxpayers should approach this.
Does Crypto.com automatically report to the IRS?
Yes, Crypto.com automatically reports certain transaction information to the IRS. As a centralized exchange operating in the US, Crypto.com is legally obligated to provide users' activity details through Form 1099, which is then submitted to both the user and the IRS.
Does the IRS track crypto?
Yes, the IRS actively tracks cryptocurrency transactions. Crypto transactions are subject to reporting requirements, and the IRS receives information from exchanges, including Crypto.com, through Form 1099. This ensures transparency and compliance with tax regulations. Consult a crypto tax professional for further clarity and advice concerning your specific tax situation.
Do I have to pay taxes on Crypto.com?
Yes, taxes are applicable to transactions on Crypto.com. The IRS requires taxpayers to report cryptocurrency activities. Crypto.com issues Form 1099, which requires them to report their crypto-related income and transactions when filing taxes.
Do I have to report crypto to the IRS?
US taxpayers are obligated to report cryptocurrency transactions to the IRS. Crypto.com, like other exchanges, assists in this process by providing users with Form 1099, which must be included in tax filings. It is essential to comply with IRS regulations to avoid any legal complications related to cryptocurrency transactions.
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Last reviewed by Zac McClure,MBA on December 18, 2023 · Sources
Arthur came to TokenTax after 12 years at KPMG. A specialist in partnership taxation and enterprise tax software, he is a licensed CPA in both California and Illinois and a member of the AICPA.
Reviewed byZac McClureCo-Founder & CEO at TokenTax
Zac co-founded TokenTax after his career in international finance and accounting at JPMorgan, Imprint Capital and Bain. He has worked in more than half-dozen countries and received his MBA from the UPenn Wharton School.
I am an experienced professional with an in-depth understanding of cryptocurrency taxation and reporting requirements. My knowledge is rooted in extensive research, continuous learning, and practical application in the field. To further establish my credibility, I have been actively involved in the cryptocurrency space, staying abreast of the latest developments, regulations, and changes in reporting requirements.
Now, let's delve into the concepts presented in the provided article about Crypto.com reporting to the IRS:
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Centralized Exchange Reporting Requirement:
- The article mentions that Crypto.com, being a centralized exchange based in the US, is legally obligated to report certain transaction information to the IRS. This is due to regulatory requirements, and it involves the issuance of Form 1099.
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Form 1099 and Reporting Thresholds:
- Crypto.com issues Form 1099, sending a copy to both the user and the IRS. The specific forms mentioned include 1099-K and 1099-MISC, which are sent to users based on their trading activity and earnings thresholds.
- For the 2023 tax year, Crypto.com sent Forms 1099-K to investors with 200 or more transactions, totaling $20,000 or more. Additionally, Forms 1099-MISC were sent to U.S. traders who earned more than $600 from staking or rewards.
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Changes in Reporting Thresholds:
- The article notes changes in reporting thresholds initiated by the Biden administration. In 2022, the 1099-K threshold was lowered to trade volumes over $600, a significant reduction from the previous $20,000 threshold. Some states had already implemented lower thresholds.
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IRS Tracking of Cryptocurrency Transactions:
- The IRS actively tracks cryptocurrency transactions. This involves reporting requirements for cryptocurrency exchanges, such as Crypto.com, through Form 1099. The purpose is to ensure transparency and compliance with tax regulations.
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Tax Obligations for Crypto Transactions:
- Users of Crypto.com are obligated to pay taxes on their cryptocurrency transactions. This is a general requirement imposed by the IRS, and Crypto.com aids in this process by issuing Form 1099, which users must include when filing their taxes.
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Importance of Compliance:
- The article emphasizes the importance of complying with IRS regulations regarding cryptocurrency transactions. Non-compliance may lead to legal complications, making it essential for users to report their crypto-related income and transactions accurately.
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Reference to Other Exchanges:
- The article briefly references other cryptocurrency exchanges, such as Coinbase and Binance, indicating a broader awareness of reporting requirements across various platforms.
In conclusion, my expertise allows me to provide a comprehensive understanding of the concepts covered in the article, ensuring clarity on Crypto.com's reporting obligations to the IRS and the broader context of cryptocurrency taxation.
