I have been following bitcoin since it was $500. I have not bought any, and this point, I don't intend to.
I do have some comments/questions that maybe you can respond to.
Coinbase is an American publicly traded company that operates a cryptocurrency exchange platform. So, if I wanted to buy or sell Bitcoins, I could do that by going through Coinbase?
Here's my question...If I were to sell $600 worth of Bitcoins through an exchange like Coinbase, would they then issue a 1099K to me and the IRS?
I believe they will issue a 1099k. I also believe this will create turmoil in the entire crypto industry as the IRS will now have insight to any crypto account that converts crypto to cash greater than $600 per year.
What's your take?
I have been audited by the IRS over crypto. Trust me, they have agents assigned to this stuff who know what they are doing. Accurate and “supportable” records are the key. I had a several year enema from them over crypto. And I thought I reported everything accurately. They were pulling $3 transactions from 2013 and asking what it was, where did it go, and prove it. I could do that with most of them…but the ones I couldn’t were priced to market.
Coinbase will start issuing 1099’s this tax year (I think.). Their process will be no different than a regular brokerage.
My only advice to anyone doing this stuff is to stay away from day trading and stay away from the weird alt-coins. And finally, don’t invest a dime that you cannot afford to lose.