Home |IRS Tax Return | I received a CP2000 notice from the IRS, and they instructed me to fill out a Schedule D (1040) and a 8949 for my crypto transactions on Robinhood. What to do?

I received a CP2000 notice from the IRS, and they instructed me to fill out a Schedule D (1040) and a 8949 for my crypto transactions on Robinhood. What to do?

Robert James, 20+ years of experience in IRS matters
Answered on October 07,2023

Robinhood give you all the information on the 1099 form.

One easy way to do this is to use FreeTaxUSA - make sure you select the correct tax year, which is probably 2021. You can enter a summary of the capital gains income as long as you also send a full copy of the 1099 from Robinhood with your response.

You would just say Robinhood Crypto for the description, and enter the Net proceeds and Net cost basis from the 1099. That way FreeTaxUSA will enter the summary on Form 8949 and the Schedule D.

You can also recreate the rest of your tax return that year, just to see the difference. If you had a net loss you should actually get a small refund after the forms are processed. You have to finalize the return to get the forms you need to print, but since it's an older year you don't have to worry about it getting submitted to IRS. Then just print the Form 8949 and Schedule D.

Remember if you do this to send a copy of the full 1099 with your response. And if you did any other stock trading on Robinhood, there's a separate 1099 for that that would also need to be included.

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