The discrepancy between your CoinTracker tax report and your 1099 forms primarily stem 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.
- 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 an 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 key difference is in the type of information each document provides. The 1099 forms report transaction volumes, while CoinTracker reports show your capital gains or losses. This is why you’ll notice a mismatch—they serve different purposes. The 1099-K or 1099-B helps the IRS identify high transaction users, but these numbers are not used for your tax filing. For that, you need your capital gains and losses, which CoinTracker calculates.
Disclaimer: CoinTracker is provided for informational purposes and is not intended as tax, audit, accounting, investment, financial, or legal advice. For financial, tax, or legal advice, please consult your own professional. Please see our full disclaimer.