Filing an Uphold 1099-K

Did you get a scary 1099-K from Uphold? Maybe it showed that you have “Gross Transactions” of 20 to 200 times your Uphold account balance?



A 1099-K is usually just for a merchant’s credit card sales, but the IRS won a court case against Coinbase, forcing Coinbase, Gemini, and Uphold to report gains for some of their users. Filing a 1099-K allows them to limit the reporting to those who had over 200 transactions and over $20,000 in transaction history, instead of reporting on everyone. First thing you have to know about this is that it is pretty much a meaningless number. It only serves as a indicator of the magnitude of a client’s volume of activity, so if you moved $100 between Uphold cards 1,000 times (which happens all the time with Heleum users) then this form will say at least $100,000. So it’s not really income. But it got reported to the IRS, right? Yes. Yes it did. So if you don’t do ANYTHING about it, then the IRS might think it is income. To fix it, you have to invalidate the 1099-K (called “backing it out”) and then report your actual trades and your actual gains on a Form 8949. So far, there is no other way to address this. We’ll take you step-by-step through the process. Let’s get to it!


Step 1: Backing Out the 1099-K

Download the 1099-K from Uphold as seen here:

Take note of the amount in 1a. (The crazy high number) Now you’re going to have to negate that number by submitting another 1099-K with the opposite value.

Create a new 1099-K here (page 4) and enter the following as seen in the pic below:

  • FILER’S Name: “Manual Adjustment”
  • PAYEE’S TIN: Your TIN (SSN if an individual)
  • 1a Gross Amount: the NEGATIVE Sum of what’s in 1a on Uphold’s 1099-K. If the figure on your Uphold 1099-K is 101213.74, then on the Manual, it will be 101213.74.

When filing your taxes, include both the Uphold 1099-K and the Manual Adjustment 1099-K. Next, you’ll need to report your specific Uphold trades.


Step 2: Preparing the Gain/Loss Statement

This step will help you access your Gain/Loss Statement from Uphold, and edit that Statement to properly record all fees (reducing taxable gain by up to 10%) and allow it to serve as an attachment for a Form 8949 (as a substitute for not having a 1099-B).

First, Download your Gain and Loss Statement from Uphold as seen here:

It’s a CSV, so you can open it in Google Docs (Sheets), or in Excel. Make the following adjustments:

  1. Delete transactions from 2018
  2. Add a column before “Gain/Loss (USD)” called “Amount of Adjustment”
  3. Delete the following columns:
    • Transaction ID
    • Total Transaction Amount (USD)
    • Source Transaction ID
    • Source Amount
    • Unit Purchase Price
    • Unit Sell Price
    • Gain/Loss%
    • Holding Period
  4. Put remaining columns in the following order which should match the IRS Form 8949:
    • Transaction Description,
    • Transaction Source(s),
    • Date Acquired,
    • Date Sold,
    • Proceeds (USD),
    • Cost or Other Basis (USD),
    • Amount of Adjustment,
    • Gain/Loss (USD)
  5. Record Heleum fees to Amount of Adjustment column:
    1. These transactions should say “Transferred to user ##.## USD” in the Transaction Description. They’ll be immediately after a transaction from crypto to USD. You can double-check them against the fees listed on your Popped Balloon Details in the Heleum app (app.heleum.com).
    2. For each fee, move the amount in Proceeds to the Amount of Adjustment of the transaction above as a NEGATIVE number. So if you paid us $5.14 for that balloon pop, you’ll look at the previous transaction from a crypto to USD, and in the Amount of Adjustment column, enter “5.14″.
  6. Delete bank deposits/withdrawals/transfers with other users.
    • This includes if you received BCH or BTG from the forks and haven’t sold any, and the “Transferred to User” rows.
  7. Turn “Gain/Loss (USD)” cells into formula:
    • Proceeds MINUS Cost PLUS Adjustment. Example: =E32-F32+G32
    • Make sure to fill previously empty cells. This will let you count the Uphold conversion fee on starting moves (going from USD to crypto).
  8. Replace the Aggregate 2017 Gain/Loss value at the top with your new sum of Gain/Loss(USD)
  9. Remove Disclaimers/Descriptions

Save this to a CSV or XLS file (not a PDF) and attach it to the Form 8949 when you file. Take note of the sum totals for the final 4 columns. You’ll use them next.


Step 3: Submitting the Form 8949

See the fillable IRS Form 8949 here. Of course if you file your taxes online, they’ll give you the same options to fill out.

  1. Enter your info at the top.
  2. In PART 1 “Short-Term.” Check Box C.
  3. In the table below, in the first row enter the following based on the prepared Gain/Loss Statement:
    • (a) “Uphold – See Attached Statement”
    • Skip (b) and (c)
    • (d) [Enter Sum of Proceeds]
    • (e) [Enter Sum of Costs]
    • (f) “M”
    • (g) [Enter Sum of Adjustments]
    • (h) [Enter Sum of Gain/Loss]
  4. If Uphold is your only Capital Gains for the year, just copy the totals to the Totals section.
  5. If you have no Long-Term Capital Gains, leave Page 2 blank
  6. Copy the 8949 Totals to Schedule D (Form 1040), Line 3

Make sure you can somehow attach the edited Gain/Loss Statement CSV or XLS document along with your Form 8949 information.

THAT’S ALL! If you followed the steps above: backing out the 1099-K, Preparing the list of trades, Reporting the Capital Gains on Form 8949 and Form 1040, you could be done with this weird little corner of your taxes.


Additional info:

If you would like to extend your filing date by 6 months (1-3% in fees) you can file an extension here.

For information on an extended installment plan to pay your tax burden over time, click here.

For more information on taxes from Uphold: https://support.uphold.com/hc/en-us/articles/360000130263-Taxes-FAQ

Special Thanks to CPA Clinton Donnelly at CryptoTaxPrep.com and Donnellytaxlaw.com, an Enrolled Agent licensed by the IRS to represent US taxpayers around the world. He specializes in cryptocurrency and supplied the instructions listed on this page. We did a webinar with him that you can watch here to get the full picture:

 DISCLAIMER: This article is only applicable to US citizens. It does NOT constitute legal or tax advice from Heleum LLC or from Pace Ellsworth and may not apply to your specific situation. Please consult a tax professional like Clinton Donnelly. 🙂