Coinbase Releases Tax Calculator But Many Users Will Likely Not Qualify
Coinbase customers can calculate their cryptocurrency tax obligations this year, provided they meet multiple requirements.
In a blog post, Coinbase announced some users could use its form generation options to calculate tax owed on cryptocurrency gains ahead of this year’s Internal Revenue Service (IRS) reporting deadline of April 17.
The move comes following years of struggle between the company and the IRS, with court battles over data access dragging on after the agency suspected Coinbase of aiding tax evasion by its users.
“For our customers who have only bought or sold digital assets on Coinbase, we offer a tool that automatically calculates your gains or losses based on a first-in-first-out (FIFO) accounting method,” the post confirms, adding that other calculation methods are also supported.
The number of Coinbase users eligible to use the tool may be limited.
The blog post also contains a list of circumstances which would exempt a user’s transaction history from being compatible, these including participating in an ICO or even simply using another exchange.
The company states:
“Please be advised that this report will only be accurate for customers who have not transacted outside of Coinbase. Do not use this report if you have:
1. Bought or sold digital assets on another exchange
2. Sent or received digital assets from a non-Coinbase wallet
3. Sent or received digital assets from another exchange (including GDAX)
4. Stored digital assets on an external storage device (i.e., Trezor, Ledger, etc.)
5. Participated in an ICO
6. Previously used a method other than FIFO to determine your gains/losses on digital asset investments”
Coinbase is not the first tax calculation offering to hit the market. In August 2017, fellow US startup Node40 released calculation software, initially focused on Dash but which then expanded to other currencies including Bitcoin.