US Gets Dedicated IRS-Friendly Crypto Reporting Software
Crypto earnings reporting is about to get simpler in the US thanks to a dedicated tool which should automatically calculate gains.
Amid Coinbase’s battle with the US Internal Revenue Service (IRS), one startup has released software dedicated to crypto tax reporting for consumers.
The tool, released by New York-based Dash masternode provider Node40, allows users to automatically calculate gains and losses from trades and sync them to a 8949 tax report form which can be sent to the IRS for analysis.
“A simple FIFO (first in, first out) [accounting] strategy is not sufficient for dealing with digital currency transactions,” Node40 CEO Perry Woodin said in a press release on Wednesday.
“Node40 Balance uses the true carrying cost and days held to calculate precise valuations that ensure you are not over-reporting your tax liability.”
Interestingly, the first incarnation of the company’s solution will only support Dash, with Bitcoin following later in the year.
The reveal comes at a timely moment in the ongoing debacle over US customer tax reporting of cryptocurrency capital gains.
As part of its investigation into Coinbase, the IRS produced evidence stating that, on average, only 800 people per year report such gains, with the number falling through 2015, the last year for which statistics were produced.
“The burden of calculating tax liability falls completely on the user,” Woodin continued. “[...] We want this to become an indispensible tool for every digital currency user across America.”