Tax Obligation : 1099-B Cash App

[Thappere78]

I bought about $ 500 using the app and now Cashapp sends out 1099s as soon as I send those currencies?
What will the proceeds be on these transactions?

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[jackg]

Does you're 1099-B include profit you've made? You might have to just submit it with your tax return if so but I didn't think they gave 1099d for such small amounts (relative to what the tax agencies assume is small).

[bitnoo]

This all I could get out of them when asking about their handling of bitcoin taxes.  I am guessing they don't send anything unless you sell on their app, but I have yet to get any concrete information on this.

Im Benjamin, and I'm with Cash Support; thanks for taking the time to reach out to us about the potential tax documents you may receive as part of using our investing tools. Let me explain what you can expect!

Cash App will provide an annual 1099-B to Cash App customers who have made a sale of bitcoin during the calendar year. To learn more about the 1099-B tax reporting and bitcoin, visit our Support Center.

In order to calculate your taxable gains and losses, please refer to your account activity history in Cash App. Cash App does not report a cost basis for your Bitcoin sales to the IRS.

Cash App does not provide tax advice. If you have questions about your particular tax situation you should consult a tax advisor. This is not tax advice.

[figmentofmyass]

This all I could get out of them when asking about their handling of bitcoin taxes.  I am guessing they don't send anything unless you sell on their app, but I have yet to get any concrete information on this.

a 1099-B only pertains to taxable transactions, generally sales. there would be nothing to list if you didn't sell through their app so i assume if you only buy that you won't get one.

this is different from coinbase, kraken, etc who send out 1099-K forms. with them, you can conceivably pass the 200 transaction + $20k threshold just by buying. then you will receive a 1099-K.

Cash App does not report a cost basis for your Bitcoin sales to the IRS.

at the cost of convenience, that at least means you don't have to correct their mistakes or worry about them exaggerating your gains to the IRS.

[bitnoo]

I found posts on reddit where a cashapp rep was telling people they would receive a 1099-b if they transferred the coin off the wallet also. That being said, I have been unable to confirm that fact through their support or with anyone who has gotten a tax form from them this tax season.  I'd rather not fool with taxes at all at this point since they don't show the cash basis on their app at all.

[figmentofmyass]

I found posts on reddit where a cashapp rep was telling people they would receive a 1099-b if they transferred the coin off the wallet also.

i don't understand how that works since they wouldn't be able to determine gross/net proceeds or really any of the information required by the 1099-B. i'm guessing the reddit rep was misinformed or there was otherwise some miscommunication or misunderstanding.

you can see who must file a 1099-B here under "specific instructions": https://www.irs.gov/pub/irs-pdf/i1099b.pdf

i don't see how someone only buying/withdrawing BTC fits any of those conditions, or why square would spend time/money sending 1099s when they aren't required.

I'd rather not fool with taxes at all at this point since they don't show the cash basis on their app at all.

not showing basis just means the burden is on you to track and report all your gains and losses, instead of relying on what square reports.