Cryptocurrencies and other crypto-related assets have taken off in the last few years with many individuals and institutional investors taking a keen interest in the technology and how it will likely shape the future of money.
Crypto.com is one of the popular centralized cryptocurrency exchanges which is supported in 90+ countries around the world with over 50 million users and counting. The exchange is one of the most sought-after crypto exchanges in countries like the United States and Canada.
With the increasing regulations surrounding cryptocurrencies and other virtual currencies around the world, many investors are concerned about the reporting requirements and the compliance of the exchanges or crypto wallets they use for trading cryptocurrencies.
If you currently use Crypto.com to buy, sell, and trade cryptocurrencies, then you might be wondering, does Crypto.com report to the IRS?
The IRS is the tax collection agency of the United States government. The agency is responsible for enforcing the tax code of the country and ensuring that citizens comply with their respective tax obligations.
In recent years, the agency has taken a keen interest in the taxation of cryptocurrencies and other virtual currencies and it has issued various guides on how crypto transactions can be reported correctly by citizens in their tax returns.
Here in this article, we will be exploring the Crypto.com exchange and its current policies as regards to tax reports and ultimately find out if the exchange automatically reports user transactions to the US tax agency.
Does Crypto.com Report To The Internal Revenue Service (IRS)?
Crypto.com is a registered financial institution in the United States thus the crypto exchange is legally required to report certain user transaction information to the IRS for tax purposes.
When a user of the Crypto.com exchange earns $600 or more from taxable events such as staking rewards, referrals, trading crypto, and more, the exchange generates/issues a Form 1099-MISC which is sent to both the user in question and the Internal Revenue Service (IRS).
If you receive a Form 1099-MISC from Crypto.com, usually via email, then you will need to report crypto on your taxes when filing your tax returns either with the IRS or the tax agency in your country of residence.
While in most cases, Crypto.com will automatically generate the appropriate tax forms for you whenever your earnings on the exchange are considered taxable, it is still important to keep track of your transactions and consult a tax specialist to ensure you file your crypto taxes accordingly and appropriately.
Does Crypto.com Send Form 1099 To IRS?
Yes, Crypto.com automatically generates a Form 1099 whenever a user earns $600 or more on the crypto exchange.
When the exchange issues a Form 1099, it sends out 2 copies of the form – one to the user and one to the IRS so yes, Crypto.com does send your Form 1099 to the IRS automatically.
An issued Form 1099 on Crypto.com will include items such as lockup rewards, referral program rewards, and other items which are considered to generate taxable income for the user.
Whenever a Form 1099 is issued to a user on Crypto.com, the IRS expects that the user in question will report the itemized amounts as income on their annual tax returns.
Failure to report your crypto income on your taxes when filing your tax returns exposes you to certain consequences and issues with the IRS, including an increased likelihood of an IRS audit or worse.
Do I Have To Report To IRS From Crypto.com?
As a crypto investor using any of the crypto exchanges and crypto wallets, you’re fully responsible for reporting your taxable crypto earnings to the Internal Revenue Service (IRS) or the appropriate tax agency in your country if you don’t live in the United States.
In most cases, Crypto.com will automatically generate a Form 1099 and send out a copy of the tax report to your email address and the IRS.
In cases where Crypto.com fails to automatically generate your tax form, you can either contact the Crypto.com support team or download your transaction history from the exchange and generate the tax form yourself either manually or using any of the Crypto tax software available right now.
How To File Your Crypto.com Taxes Correctly
In most cases, Crypto.com will automatically issue the correct tax documents for you to file your taxes when your taxable earnings on the platform surpass $600.
If for some reason the exchange doesn’t automatically generate the appropriate tax documents based on your crypto earnings on the platform, there are other ways to file your Crypto.com taxes easily.
For filing your Crypto.com taxes, we recommend using a crypto tax software known as Koinly. Koinly allows users to easily generate their crypto tax reports and categorize their crypto transactions into gains, losses, and income.
To file your Crypto.com taxes using Koinly, you have to first sign up for an account using this link. While signing up for an account, ensure you select your country of residence and currency correctly as this information will be vital when generating your tax report.
After creating your Koinly account, you can either link your Crypto.com account to Koinly via the Crypto.com API or download your full transaction history on Crypto.com (as a CSV file) and import it to the Koinly platform.
Any method you choose will work but we recommend connecting your crypto.com account to Koinly via the Crypto.com API.
When you’re done with either connecting your account to Koinly via API or uploading your transaction history, Koinly will automatically categorize your Crypto.com transactions into gains, losses, and income. Once that’s done, the tax software will calculate your Crypto.com gains and income tax and generate your Crypto.com tax report.
Crypto.com is a Singapore-based cryptocurrency exchange that has seen a massive uptick in both user growth and daily crypto trading volume over the past few years. The exchange offers a wide range of services including buying and selling cryptocurrencies, staking, and more.
Since Crypto.com is also a registered financial institution in the United States, the exchange reports transactions of users who have earned up to $600 in taxable income from various features on the exchange including referrals, staking rewards, trading cryptocurrencies, and more.
That said, it is also vital for cryptocurrency investors and users of the Crypto.com exchange and other crypto exchanges to understand how cryptocurrencies and other virtual currencies are taxed in their respective jurisdictions and comply accordingly.
The tax agency of the United States government – the Internal Revenue Service (IRS) has made it clear that cryptocurrencies and other digital currencies are considered properties and are taxed like other assets also considered properties.
And that will be it for this guide. If you were initially wondering whether Crypto.com is required to report to the IRS and if they are required to report their activities to the IRS, then we hope you found this article helpful.