Crypto Taxes
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The Crypto Investor’s Guide to Form 1099-B (2023)

The Crypto Investor’s Guide to Form 1099-B (2023)

Form 1099-B can make it easy to report your cryptocurrency capital gains — but it may contain inaccurate or incomplete information about your tax liability.

In this guide, we’ll cover everything you need to know about Form 1099-B for cryptocurrency taxes. We’ll explain what you should do if you receive Form 1099-B and discuss why Form 1099-B can lead to tax reporting issues for crypto investors. 

Do I have to report crypto on my taxes? 

Cryptocurrency is considered property by the IRS and is subject to capital gains and ordinary income tax. 

Capital gains vs ordinary income for crypto

For more information, check out our comprehensive guide to cryptocurrency taxes

What is Form 1099-B? 

Form 1099-B is a tax form designed to track the disposals of capital assets. The form contains details about cost basis, gross proceeds, and capital gains and losses. 

Like other 1099 forms, Form 1099-B is issued to taxpayers and to the IRS. 

Stockbrokers like Robinhood and eTrade typically send out 1099-Bs for your stock trading activity at the end of the year. At this time, cryptocurrency exchanges are not required to send 1099-Bs to customers.

Do you get a 1099-B for cryptocurrency? 

As of 2021, there hasn’t been explicit guidance around what 1099s cryptocurrency exchanges should provide to customers and the IRS. As a result, different exchanges take different approaches to tax reporting. 

While some exchanges issue 1099-B to customers, most currently do not send tax forms detailing capital gains and losses to customers. 

This will change in the near future. The Build Back Better Act included requirements for cryptocurrency brokers to report capital gains and losses to customers and the IRS. 

It’s not yet clear when mandatory 1099 reporting will go into effect. The IRS announced  in December 2022 that these requirements would be delayed indefinitely.

What tax forms should I receive from cryptocurrency exchanges? 

Cryptocurrency exchanges may send you other versions of Form 1099 — such as Form 1099-MISC and Form 1099-K

Does Coinbase issue Form 1099-B? 

Like other major exchanges, Coinbase currently does not issue Form 1099-B to customers and the IRS. For more information, check out our guide: Does Coinbase Report to the IRS? 

Which exchanges issue 1099-B? 

Here are some popular exchanges that issued Form 1099-B to customers for the 2021 tax year. 

  • Bittrex 
  • BlockFi 
  • Cash App 
  • Robinhood 
  • Uphold 

Do I need to include 1099-B on my tax return? 

There’s no need to attach Form 1099-B on your tax return, but you can use the information on the form to keep track of your capital gains and losses.

What happens if I don’t report 1099-B income to the IRS? 

If you don’t report taxable income that’s been reported to the IRS on Form 1099-B, it’s likely that your tax return will be flagged automatically and you will be sent a warning letter about your unpaid tax liability. 

Remember, all of your cryptocurrency disposals and income are required to be reported whether they are on Form 1099 or not. The IRS can often track your cryptocurrency transactions even if they are not mentioned on these tax forms.

How do I report cryptocurrency disposals? 

All cryptocurrency disposals (including those reported on a 1099-B) should be reported on Form 8949, along with a description of the property, your cost basis and gross proceeds, and the date you acquired and disposed of your assets. 

For more information, check out our guide to reporting your cryptocurrency taxes

What happens if I didn’t get a 1099-B from my exchange? 

You are required to report all your taxable transactions to the IRS regardless of whether your exchange sends relevant tax forms. Failure to do so is considered tax fraud. 

Which crypto exchanges do not report to the IRS? 

At this time, centralized exchanges like KuCoin and decentralized exchanges like Uniswap do not issue Form 1099-B or other tax forms to the IRS. 

Still, it’s important to remember that not reporting your cryptocurrency income on your tax return can lead to fines, audits, and even potential jail time. 

For more information, check out our guide to non-KYC exchanges.

Why does my Form 1099-B have incomplete/inaccurate information? 

Transfers between different exchanges and wallets can lead to inaccuracies on Form 1099-B. In these situations, your cryptocurrency exchange might not have data on cost basis that’s needed to calculate your capital gains and losses. 

For example, consider the following scenario. 

Wallet to wallet transfer example

In this case, David should incur a capital gain of $5,000. But because Gemini likely doesn’t know David’s original cost basis, it may report his cost basis as ‘n/a’ or ‘$0’ on his Form 1099-B. 

If David cannot prove that he originally bought his Bitcoin for $10,000, he might be on the hook for $15,000 of capital gain.

To avoid a scenario like this, you can use crypto tax software like CoinLedger to track your cost basis across multiple exchanges and wallets. 

How CoinLedger can help

When you connect your wallets and exchanges to CoinLedger, the platform can connect to your wallets and exchanges and generate a comprehensive tax report in minutes!

  1. Connect your wallets and exchanges to CoinLedger. 
  2. Double check your transactions! 
  3. Generate a tax report! 

Get started with CoinLedger

There’s no need to track your transactions manually on a spreadsheet — simply connect your wallets and let the platform do the work. With automatic integrations to exchanges like Coinbase, Kraken, Gemini and wallets like MetaMask, it’s never been easier to file your crypto taxes.

More than 300,000 investors use CoinLedger to generate comprehensive tax reports in minutes. 

Get started with a free preview report today


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