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Coinbase Releases Cryptocurrency Tax Calculator
The U.S cryptocurrency exchange is easing the crypto tax procedure with a new automatic gain/loss calculator.
By Wolfie Zhao
Updated Sep 13, 2021, 7:40 a.m. Published Mar 13, 2018, 4:30 a.m.
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Cryptocurrency startup Coinbase has launched a new gain/loss calculating tool as part of an effort to help its user base keep up with U.S. tax requirements.
In a blog post published on Tuesday, the firm explained that the calculator can be used to generate a report which outlines their capital gains (or losses) on its platform, using a first-in-first-out (FIFO) accounting method.
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The tool comes with a few caveats, however, namely that it's primarily aimed at users who have bought and sold on Coinbase exclusively – and isn't recommended for those who have purchased digital assets elsewhere or participated in an initial coin offering, per the blog.
"This tool provides a preliminary gain/loss calculation to assist our customers, but should not be used as official tax documentation without validating the results with your tax professional," the startup also cautioned.
Its release follows an earlier step by Coinbase on the tax front, when, in January, the startup reminded its users that they are liable for U.S. capital gains, even going as far as posting a consistent banner about the issue.
The issue of taxation and cryptocurrencies has always been someone of a contentious topic, ever since the U.S. Internal Revenue Service announced in 2014 that it would treat such assets as a taxable form of property rather than, say, a currency.
Concerns over the ambiguity of the IRS guidance – in its new blog, Coinbase itself writes that "we understand taxes for digital currency can be complicated" – have fueled complaints from professional circles.
The topic also carries an added degree of weight for Coinbase specifically, which was the target of a lawsuit by the IRS as it sought information on U.S.-based users in an effort to sniff out potential tax avoiders.
Ultimately, the startup would send information on about 13,000 users who had transacted on the platform between 2013 and 2015 after being ordered to by a U.S. district judge in November 2017.
Bitcoins and keyboard image via Shutterstock
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