How can I avoid a 1099-K form when trading cryptocurrencies?

3 answers

• Dec 27, 2021 · 3 years ago
  One way to potentially avoid receiving a 1099-K form when trading cryptocurrencies is to keep your trading activities below the threshold set by the IRS. The IRS requires cryptocurrency exchanges to issue a 1099-K form if your trading volume exceeds a certain threshold. By keeping your trading volume below this threshold, you may be able to avoid receiving the form. However, it's important to note that this threshold can vary, so it's best to consult with a tax professional for specific guidance.
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• Dec 27, 2021 · 3 years ago
  Another way to potentially avoid a 1099-K form is to use a decentralized exchange (DEX) instead of a centralized exchange. DEXs operate on a peer-to-peer basis and do not typically issue 1099-K forms. However, it's important to note that DEXs may have their own reporting requirements, so it's important to research and understand the tax implications of using a DEX.
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• Dec 27, 2021 · 3 years ago
  At BYDFi, we understand the concerns around 1099-K forms when trading cryptocurrencies. While we cannot provide specific tax advice, one strategy that some traders use is to keep detailed records of their trades. By maintaining accurate records of your trades, you can provide this information to your tax professional, which may help in accurately reporting your cryptocurrency trading activities and potentially reduce the chances of receiving a 1099-K form. It's always best to consult with a tax professional for personalized advice based on your specific situation.
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