Coinbase Taxation 2025: How to Report Your Crypto Trades, Rewards, and Income Correctly

As the most popular crypto exchange in the United States, Coinbase is often the first stop for investors and traders. But when it comes to taxes, many users are confused about how to report Coinbase activity correctly. That’s why understanding Coinbase taxation is so important.

In this guide, we’ll break down what Coinbase reports to the IRS, what forms to expect, how to report rewards and trades, and how to make tax season stress free with proper crypto tax planning.

Does Coinbase Report to the IRS?

Yes. Coinbase does report to the IRS. In fact, they’ve been doing so since 2017. If you’re trading or earning through Coinbase, there’s a high chance the IRS already knows.

Here’s what you should know:

• Coinbase sends Form 1099-MISC or 1099-DA (new in 2025) to both you and the IRS.

• These forms include details of staking rewards, bonuses, and other income over $600.

• Capital gains from trades are your responsibility to calculate and report.

Even if you didn’t receive a form, you’re still required to report your gains and income.

What Crypto Activities Are Taxable on Coinbase?

According to the IRS, any of the following Coinbase activities are considered taxable events:

• Selling crypto for fiat (e.g., USD)

• Trading crypto for crypto (e.g., BTC → ETH)

• Using crypto to make purchases

• Receiving rewards from Coinbase Earn or staking

• Airdrops or bonuses received through Coinbase

Understanding coinbase taxation starts by classifying your activities into two categories: capital gains and income.

Capital Gains: Reporting Your Coinbase Trades

Any time you sell or trade crypto on Coinbase, you must calculate the capital gain or loss.

Capital Gain = Selling Price – Cost Basis

Example:

• You bought 1 ETH for $1,500.

• You sold it on Coinbase for $2,200.

• Your capital gain is $700, which must be reported on Form 8949 and Schedule D.

Note: If you didn’t keep records of your cost basis, our crypto tax calculation service or expert help from the team at CryptoTaxEase can assist in recovering it using blockchain data.

Income: Reporting Rewards and Staking

Did you participate in:

• Coinbase Earn

• Staking on Coinbase

• Referral bonuses

• Airdrops through your Coinbase wallet?

These are all considered ordinary income and must be reported based on the fair market value (FMV) at the time of receipt. You’ll likely receive a 1099-MISC or 1099-DA, but even if you don’t, the income is still taxable.

At CryptoTaxEase, we provide crypto airdrop tax reporting to correctly classify and timestamp each reward to match IRS standards.

How to Get Your Coinbase Tax Documents

Coinbase allows you to download a full transaction history. To do this:

1. Log into your Coinbase account

2. Go to Reports > Taxes

3. Download:

   • Annual summaries (1099s)

   • Full CSV of trades, rewards, buys, sells

Make sure your crypto tax professional (or software) imports these files accurately.

Common Coinbase Taxation Mistakes to Avoid

Coinbase may send forms for income, but they don’t track your cost basis on every trade, especially if you move assets off platform. Not reporting crypto to crypto trades Swapping BTC for ETH? That’s a taxable event, even if no cash was involved. Ignoring small transactions Even $5 staking rewards count. When compounded, they can result in thousands in underreported income.

Coinbase and DeFi Wallets

If you’re using Coinbase Wallet (a non custodial DeFi wallet), you must track all off platform activity manually.

That includes:

• Swaps via Uniswap

• NFT purchases via OpenSea

• Staking rewards on protocols like Lido

How CryptoTaxEase Helps You Handle Coinbase Taxation

As a crypto native accounting firm, we specialize in Coinbase taxation, including:

• Reviewing all buys, sells, and rewards Reconstructing cost basis
• Matching staking and Earn income to daily prices
• Generating tax reports for Form 8949, Schedule D, and Schedule C (business income)
• Fixing past reporting errors from 2021–2024

Need help with your Coinbase taxes in 2025? Our experts will clean up your wallet records, optimize your crypto tax planning, and make sure you’re fully IRS compliant.

Tips to Lower Your Crypto Tax Bill

• Harvest crypto losses before year end to offset gains
• Use staking platforms with flexible tax options
• Pay attention to coinbase prices on reward dates to avoid overpaying
• Reinvest income smartly through DeFi protocols
• Consult with a crypto tax advisor on entity structuring if you’re a business

As Coinbase continues to evolve, so do IRS rules around crypto reporting. Whether you’re a casual investor or run a Web3 business, it’s critical to understand your tax obligations and use the right tools to stay ahead. Don’t rely on automated forms or guesswork. With expert help from CryptoTaxEase, you can handle your Coinbase activity with clarity and confidence.

📞 Book your free consultation now and let our tax pros handle Coinbase, DeFi, staking, and everything in between.