CashApp Taxes

Is there anyone here who’s used CashApp for buying Bitcoin and can explain how they create those 1099-b forms? Their website mentions they’ll issue a 1099-b for anyone who "sells" crypto on their app, but I’ve also come across info saying they generate a form for anyone who just buys and then moves it to another wallet. It’s kinda confusing, so any insights would be great.

I'm not sure about this, but they may also send a 1099-B if you're holding bitcoins on Cash App on 12/31 of the tax year. Their FAQ is pretty vague, but if you sold through Cash App, you'll definitely get one. We know that for sure. I would guess that if you did all your buying and selling through Cash App without withdrawing bitcoins, that the cost basis -- if listed at all -- would be more or less correct based on FIFO. Otherwise it will probably be wrong. You should be tracking all of your activity separately so you can correctly calculate your cost basis and associated gains and losses. If your basis differs from the 1099-B Cash App generates, this is how to deal with it: I would think Bitcoin is treated as a noncovered security anyway, so they probably aren't reporting cost basis to the IRS at all. It's more of a heads up to the IRS that you made sales on particular dates that totaled particular net proceeds, so make sure your Form 8949 reflects all your Cash App activity!

How would they list proceeds on a 1099 if you just transfer the coins to another wallet?  Seems like they would not have enough information to generate a form.  Their support is non existent, so I am pretty much regretting using them.  They do make it relatively easy to get bitcoin though and don't have massive fees.  As least coinbase makes it pretty clear how they handle reporting with 1099k being sent only to those meeting certain thresholds.