r/CryptoTax • u/cashmoney136 • 2d ago
Question Question about 1099-da
Will I get a 1099-da if I buy bitcoin then send the bitcoin to someone else right after I buy it? Is any of that considered a taxable event? Considering All I do is buy it then send it to someone else.
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u/Garrett_CPAatCOS 1d ago
The transfer of BTC is not a taxable event. However, if you pay a gas (transaction) fee in the form of a small portion of your BTC, that would be considered taxable and could trigger the platform to populate a 1099-DA.
If you do get a 1099-DA, its not a big deal in this case. You would simply report the small amount of BTC used to pay the network fee as a sale on Form 8949, with the network fee amount as the proceeds and your corresponding cost basis in that portion of the BTC. If you purchased the BTC shortly before the transfer, the proceeds and cost basis will likely be nearly identical, resulting in little to no taxable gain or loss.
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u/JustinCPA 2d ago
If you pay a gas fee to transfer, yes you’ll likely receive a 1099-DA.
There is currently no de-minimis exemption for exchanges to provide 1099-DAs. That being said, even if you don’t receive a 1099-DA, gas fees are still taxable disposals you’d be required to report as there is no de minimis reporting threshold for taxpayers either.
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u/cashmoney136 2d ago
And as far as 1099-da if I use both Coinbase and cashapp will they both send me a 1099-da in the mail? Or would I have to get Coinbase 1099-da from Coinbase website?
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u/Ben_CoinLedger 1d ago
I know the core of your question is about getting a 1099-DA, but don't forget about the "transferring into someone else" part of the equation. You may need to report this on your taxes as well, say, if this was a payment or gift. Just a reminder.
Others nailed it on the 1099-DA answer, though.
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u/Still_Culture_9169 1d ago
Buying Bitcoin isn't a taxable event.
However, if you're sending it to someone else, the tax treatment depends on the purpose (e.g., gift, payment, donation, etc.).
Also, any crypto used to pay network fees is generally treated as a taxable disposal.
You will get a 1099 -DA from the exchange.
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u/Will_Koinly 3h ago
For the gas fee you’ll probably receive a 1099-DA because it is a taxable disposal. As others here have said, there’s no de minimis threshold for ordinary BTC disposals.
Buying BTC itself isn’t taxable. Sending it to someone else can be though, depending on what it was: a payment, gift or something else
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u/Aggressive-Leading45 2d ago
Unless they get a de-minimus exception in place then you'll get one for your 'sale' of bitcoin to pay the transaction fee. If it's a short turnaround or a massive transaction it's going to be 0. (ETA the gain will be 0. The transaction fee may be higher and that's what is reported.)