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Transfer Transactions

In general, when we think about transferring a digital asset out of an account, there are typically two transaction types to consider:

Transaction Type & Subtype Description
Expense  Reportable disposition of a digital asset, included on the Form 1099-DA
Withdraw Moving a digital asset out of a users account, which is not reportable / included on the Form 1099-DA

 

When we think about transferring a digital asset into an account, there are several transaction types/subtypes to consider:

Transaction Type & Subtype Description
Deposit (no subtype) Cost basis is considered “missing” unless customer-provided information is provided separately
Deposit > Internal-Personal Transfer cost basis and other acquisition information from an associated Withdraw transaction, which is linked by the transaction ID.
Deposit > Gift-Received Considers both FMV and original cost basis/acquisition information when determining cost basis
Deposit > Cost-Basis-FMV Enables you to set cost basis, typically at FMV
Income Receipt of income, valued at FMV

Below are some of the typical use cases to consider for transfers between two accounts on the platform:

  • Internal Transfer
    • Description: User A is transferring a digital asset from one of their accounts to another account. The cost basis information should be carried over to the second account.
    • Transaction Types/Subtypes:
      • User A (Account 1) – Withdraw
      • User A (Account 2) – Deposit > Internal-Personal
  • Reimbursement
    • Description: User A is reimbursing User B for their half of a lunch they shared. By paying for their half of the lunch with a digital asset, User A is making a taxable disposition that is ultimately reported on the Form 1099-DA. User B’s cost basis in the digital asset would be fair market value at the time of receipt. 
    • Transaction Types/Subtypes:
      • User A – Expense
      • User B – Deposit > Cost-Basis-FMV
  • Gift
    • Description: User A gives a digital asset to User B as a gift. The disposal of the digital asset for User A is NOT reported on the 1099-DA. User B’s cost basis will either be the User A’s original basis, or the fair market value at the time of the gift; this will be determined based on the price at the time of sale.
    • Transaction Types/Subtypes:
      • User A – Withdraw > Gift-Sent
      • User B – Deposit > Gift-Received