Why does my CoinTracker tax report not match my 1099 form?
The discrepancy between your CoinTracker tax report and your 1099 form primarily stems from the type of information each document reports. Here's a breakdown to clarify the difference:
1099 Forms: These forms, including 1099-K and 1099-B, are issued by broker-dealers and some cryptocurrency exchanges like Coinbase, Gemini, and Robinhood. They record and report your aggregate transaction volume per month to both you and the IRS. Essentially, they provide a monthly summary of your transactions without delving into the specifics of gains or losses.
CoinTracker Tax Reports: CoinTracker, on the other hand, generates a IRS Form 8949 report which focuses on calculating your capital gains or losses from cryptocurrency transactions. It's tailored to meet the requirements for your tax filings, providing a detailed account of the profit or loss from each transaction.
The core difference lies in the nature of the information each document reports: the 1099 forms focus on transaction volumes, while CoinTracker's report shows capital gains or losses. This is why you'll notice a mismatch between the two; they serve different purposes. The 1099-K or 1099-B helps the IRS understand which filers are high transaction users, however, those numbers are not actually used in your tax filing. For that you need capital gains and losses to be calculated.
Disclaimer: CoinTracker is provided for informational purposes only. This service is not intended to substitute for tax, audit, accounting, investment, financial, nor legal advice. For financial, tax, or legal advice please consult your own professional. The information on CoinTracker is subject to change without notice. All information is provided "as is." CoinTracker disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Please see our full disclaimer.