- Coinbase gave the IRS information on users who handled $20,000 or more worth of crypto between 2012 and 2015.
- Coinbase answered an IRS summons in 2016 and gave info on 13,000 users, informing these users in 2018.
- It’s also possible that Coinbase is reporting, or will report, on trading activity if users joined after 2015.
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Crypto investors are often unclear about their duties when it comes to filing taxes. The following guide examines the rules that Coinbase users should be aware of when it comes to tax season.
What Information Did Coinbase Collect?
Though all crypto investors must report their capital gains, Coinbase has become well-known for working closely with the U.S. Internal Revenue Service (IRS).
Coinbase fought a summons in late 2016 when the IRS asked for data relating to over 500,000 users. This data includes:
- Date of birth
- Residential address
- Taxpayer ID number
- Account statements and invoices
- Transaction logs, including balance and wallet addresses
Coinbase eventually provided data on 13,000 users instead of the 500,000 initially requested. The exchange informed each of these 13,000 users in February 2018, two years after the summons, that their data had been sent to the IRS.
Two Kinds of Coinbase Trading Data
There are two ways the IRS may have users’ trading data.
If a trader handled $20,000 or more worth of cryptocurrency in 200 or more transactions on Coinbase between 2013 and 2015, the IRS likely received their information. This includes buying, selling, sending, or receiving crypto through the exchange.
This also includes trading in smaller sums that amounted to $20,000 or more over the course of those three years.
However, if a trader has filled out a Form 1099-K for Coinbase, it’s likely that the IRS also has their information.
Since the 2018 tax year, Coinbase has sent Form 1099-Ks to traders with over 200 orders in a tax year. In some states, these forms were sent to traders with orders equal…