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