Will I need to pay taxes if I sell Bitcoin?
The tax treatment of bitcoin transactions is complex. It is your responsibility to determine what taxes, if any, arise from your transactions involving Bitcoin on Cash App. If you sold bitcoin on Cash App, you may owe taxes relating to such sale(s). Cash App will provide you with your IRS Form 1099-B based on the IRS Form W-9 information you provided in the app. Cash App does not report a cost basis for your bitcoin sales to the IRS. In addition, note that your IRS Form 1099-B from Cash App will not include any peer-to-peer transactions involving Bitcoin on Cash App (including with other Cash App users or involving an external Bitcoin wallet).
Do I qualify for a Form 1099-B?
If you have sold Bitcoin on Cash App during the calendar year, Cash App will provide you with an IRS Form 1099-B form by February 15th of the following year of your Bitcoin sale.
Where can I locate my Form 1099-B?
You can access your Tax form in your Cash App. To do so:
- Tap on the profile icon
- Select Documents
- Select Bitcoin
- Select the 2022 1099-B
The IRS Form 1099-B will also be available to download from your desktop browser at cash.app/account.
Will the IRS receive a copy of my Form 1099-B?
Yes. Cash App is required by law to file a copy of the IRS Form 1099-B with the IRS for the applicable calendar year.
How is the proceeds amount calculated on the form?
The proceeds box amount on the IRS Form 1099-B shows the net cash proceeds from your Bitcoin sales. This means that it shows the total value of your Bitcoin sales for the calendar year BUT DOES NOT account for how much you paid to buy the Bitcoin (your cost basis).
How do I figure out my gains or losses and cost basis?
Please refer to the “Transactions CSV” located in your Cash App. To access your Transactions CSV:
- Tap on the profile icon
- Select Documents
- Select Bitcoin
- Select the 2022 Transactions CSV
You can also access your Transactions CSV from your desktop browser at cash.app/account.
Note that the Cash App CSV file may include peer-to-peer bitcoin transactions on Cash App or transactions involving external bitcoin wallets outside of Cash App and that those transactions may give rise to a taxable gain, loss, gift or other reportable event on your income tax return. You should consult with your own tax advisor regarding any such transactions.
What tax forms do I need to file for income taxes if I sold Bitcoin during the calendar year?
This depends on your individual tax situation and your specific transactions involving bitcoin. If you sold bitcoin you may need to file IRS Form 8949 and a Schedule D.
What if I buy, sell, exchange or trade Bitcoin on multiple exchanges including Cash App?
Cash App only provides records of your Bitcoin transactions on Cash App. If you buy, sell, exchange or trade Bitcoin on other exchanges you will need to obtain transaction and tax information from those exchanges.
Where can I learn more about bitcoin taxes?
The IRS maintains an FAQ section on virtual currency transactions.
The tax treatment of bitcoin transactions is complex. It is your responsibility to determine what taxes, if any, arise from your transactions involving bitcoin on Cash App. You acknowledge and agree you are solely responsible for calculating, determining, reporting and paying any applicable taxes arising from your bitcoin transactions on Cash App, including the determination of whether any gains or losses from those transactions are capital gains or losses reportable on your IRS Form 8949. Cash App does not provide tax or legal advice. If you have questions about your particular tax or legal situation you should consult a tax advisor or attorney.
FAQs
If you sold bitcoin on Cash App, you may owe taxes relating to such sale(s). Cash App will provide you with your IRS Form 1099-B based on the IRS Form W-9 information you provided in the app. Cash App does not report a cost basis for your bitcoin sales to the IRS.
Do you pay taxes on bitcoin transactions? ›
The IRS treats cryptocurrencies as property for tax purposes, which means: You pay taxes on cryptocurrency if you sell or use your crypto in a transaction, and it is worth more than it was when you purchased it. This is because you trigger capital gains or losses if its market value has changed.
Will I get taxed for using Cash App? ›
If you receive enough money through these payment processors and surpass the reporting threshold, it will count as income that you will have to pay taxes on. If you meet the thresholds set by the IRS, payment processors have to report your gross payments to the agency by issuing documents called 1099-K forms.
Is converting bitcoin to cash taxable? ›
Yes, converting any cryptocurrency to a stablecoin is a taxable event and must be reported. For example, converting BTC to USDC is a taxable event and must be reported.
Is there a fee to receive bitcoin on Cash App? ›
Accepting bitcoin: When you accept a bitcoin gift, as mentioned above an order is placed to purchase the amount of bitcoin sent. Cash App may charge a small fee when you purchase or sell bitcoin. If so, the fee will be listed on the trade confirmation before you complete the transaction.
What happens if I sell my bitcoin on Cash App? ›
If you sold bitcoin on Cash App, you may owe taxes relating to such sale(s). Cash App will provide you with your IRS Form 1099-B based on the IRS Form W-9 information you provided in the app. Cash App does not report a cost basis for your bitcoin sales to the IRS.
How much bitcoin do you have to pay taxes on? ›
You're required to pay tax on the profit you made from your sale (total sale price of your cryptocurrency minus original purchase price), commensurate with your personal tax bracket.
How do I cash out Bitcoins and avoid taxes? ›
There is no way to legally avoid taxes when cashing out cryptocurrency. However, strategies like tax-loss harvesting can help you reduce your tax bill legally. Do I have to pay tax for withdrawing crypto? You may or may not pay taxes depending on the nature of your 'withdrawal'.
Is transferring Bitcoin to a wallet taxable? ›
Key takeaways. Moving crypto between wallets you own is not taxable. You should keep records of your wallet-to-wallet transfers to easily calculate capital gains and losses in the case of a future disposal. You may pay taxes on cryptocurrency disposed of while paying transaction fees for wallet-to-wallet transfers.
Is Bitcoin traceable? ›
Bitcoin works with an unprecedented level of transparency that most people are not used to dealing with. All Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network. Bitcoin addresses are the only information used to define where bitcoins are allocated and where they are sent.
Sending and receiving money is totally free and fast, and most payments are deposited directly to your bank account in minutes.
Is buying bitcoin on Cash App worth it? ›
Whether you're new to bitcoin or a seasoned expert, Cash App is an easy and safe way to buy, store, send, and receive bitcoin.
What is the transaction fee for $1000 dollars of bitcoin? ›
Most cryptocurrency exchanges charge between 0% and 1.5% per trade, depending on whether you're a maker (buyer) or taker (seller). That means that if you've dedicated $1,000 to invest in crypto, the fee you'll pay for that transaction, on average, could be anywhere from $0 to $15.
Is sending crypto to a friend taxable? ›
Sending crypto gifts to other people does not need to be reported if you do not surpass the annual exclusion amount for each recipient. However, if you surpass the limit, you'd need to file a gift tax return using Form 709.
Do I have to report crypto if I lost money? ›
Yes, according to the IRS, investors in the US have to report all of their gains and losses each tax year on the appropriate crypto tax forms, including Schedule D and Form 8949 on their Form 1040.
