Important Notice: Crypto.com does not provide tax, legal, or financial advice. This FAQ has been prepared for informational purposes only, not as a recommendation or advice. Although we make efforts to keep this FAQ up-to-date, Crypto.com does not guarantee or represent that the information here is accurate or up-to-date. You should consult an experienced professional tax advisor regarding your personal tax situation.
In 2014, the IRS issued Notice 2014-21, 2014-16 I.R.B. 938, explaining that virtual currency is treated as property for federal income tax purposes and providing examples of how long-standing tax principles applicable to transactions involving property apply to virtual currency. The IRS also provided a series of FAQs to expand upon the examples provided in Notice 2014-21 and apply those same long-standing tax principles to additional situations.
Who receives a Form 1099-MISC?
If you received more than $600 from Crypto.com from activities such as our rewards
programs or lockup, we are required to report these on a Form 1099-MISC as
What is reported on a Form 1099-MISC?
An issued Form 1099-MISC will include items such as lockup rewards, referral program rewards, and other items that are considered to generate taxable income to the recipient.
What is not reported on a Form 1099-MISC?
Items that require a customer to make a purchase, spend, or otherwise incur a fee to obtain cash-back or a CRO reward are not included in the issued Form 1099-MISC.
For example, customers who were eligible for a reimbursement of their Spotify membership charge will not have that reimbursement reported on the Form 1099-MISC.Transactions of this type mirror similar cash-back or points programs offered by most other major credit card issuers and are post-purchase reimbursements.
How does the Form 1099-MISC help a customer accurately report income?
When a taxpayer receives a Form 1099-MISC, the IRS also receives a copy. Thus, the IRS has an expectation that the individual will report the itemized amounts as income on an annual tax return. Failure to include these transactions and report your crypto income may expose you to certain liability and consequences, such as an increased likelihood of an IRS audit.
We recommend that each customer review their Form 1099-MISC form as well as their Crypto.com account activity and then consult with a tax professional to determine the correct income that must be reported to the IRS.
Why are lockup rewards included on my Form 1099-MISC?
While the IRS has issued some guidance (see links above) on whether certain crypto-related events generate taxable income, the IRS has not released any official guidance related to lockup rewards. It has been presumed that the guidance related to mining rewards would be applied to lockup rewards, which meant that lockup rewards were treated as ordinary income and taxable to the recipient based upon the fair market value at the time of receipt. However, the exact tax characterization of lockup rewards is subject to recent and ongoing litigation involving the IRS and is not a settled matter at this time.
Until the IRS issues further guidance on lockup, or until there is legal precedent outlining a contrary position, Crypto.com will operate in accordance with the common approach of treating lockup rewards as ordinary income per previous IRS guidelines and include it on the Form 1099-MISC. Nevertheless, we recommend that you seek out advice from a qualified tax advisor to determine your own tax position.
What is the 1099-Misc form and why did I receive one?
Crypto.com may be required to issue to you a Form 1099-MISC, Miscellaneous Income, if you are a U.S. person who has earned USD $600 or more in rewards from Crypto.com during the previous calendar year from Lockup, Earn, Referrals, or certain other activities. As required by law, Crypto.com will also provide a copy of your Form 1099-MISC to theU.S. Internal Revenue Service.
What should I do with the Form 1099-MISC?
Please review U.S. Internal Revenue Service guidance or consult with an experienced professional tax advisor regarding how you should use the information provided on Form 1099-MISC and recordkeeping guidelines.
When can I expect to receive the 1099-Misc?
If your transaction activity met the $600 threshold and your transaction activity was subject to reporting on Form 1099-MISC, you should receive a copy of the form on or before January 31st of the year following the tax year to which the Form 1099-MISC relates.
How will the 1099-Misc form be sent?
You will receive an email from [email protected] to the latest email address that we have on record for you. Follow the link to download a copy of your Form 1099-MISC. Please check your spam or junk mail folders if you have not yet received a Form 1099-MISC and are expected to receive one.
How do I check my transaction history?
Your transaction history can be downloaded directly from the app.
What do I do if I think my Form 1099-Misc is incorrect?
If you believe the information on the Form 1099-MISC is incorrect, or if you believe you should have received a Form 1099-MISC and did not, or if you believe the form has been issued in error, or if you have a question relating to the form or information included on it, contact Crypto.com support via the in-app chat function.
Do I have to pay tax on the 1099-K transactions?
The 1099-K form reflects the gross volume of your transactions on the platform and is provided to you and the tax authorities for informational purposes. To determine which part of the gross volume listed on your 1099-K is taxable, please consult your tax advisor.