Sunday December 04, 2022

Coinbase makes it easy to report cryptocurrency taxes

Coinbase, one the most popular cryptocurrency exchanges, has announced that it will be adding a tax center to its app. This will allow customers to calculate the amount they might owe the IRS due to crypto transactions. This section will consolidate all taxable transactions into one place to make tax day easier. According to this FAQ from IRS, digital assets are considered property. This means that cryptocurrency transactions may need be reported as capital gains and losses. It also means that you will need to keep track of the cryptocurrency’s value over time. If you are regularly buying and selling, it can be difficult to document these transactions.
Coinbase claims that the new section will provide a “personalized summary of [a customer’s] taxable activities on Coinbase, broken down over time by realized gains/losses, and miscellaneous income.” This information can be used to file tax software such as TurboTax or taken to an accountant. Coinbase offers tax reports for upto 3,000 transactions that have been made to crypto to other DeFi (decentralized financial) services.
CNBC reported last year that many of the taxes due for cryptocurrency transactions were not being paid. Coinbase, despite confusion over the changing tax rules regarding cryptocurrency transactions, has historically not provided as much assistance to customers in reporting their gains or losses for tax purposes.
The new Coinbase tax section can be accessed from the profile icon at the top right-hand side of the interface. There, “Taxes” will appear as a menu option. The Taxes section of Coinbase’s app is accessible via the “Profile & Setting” menu. This menu can be found at the top left corner of the app’s interface. Coinbase will offer written guides and help videos over the next few weeks to help explain cryptocurrency and digital asset tax. However, for now, this overview by CNET is a good place to start.

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