Summary:

Coinbase is adding a new tax centre to its app and website to help US customers work out how much they might owe to the IRS. The new section will show “a personalized summary of a customer’s taxable activity on Coinbase,” broken out over time. This information can then be taken to an accountant or used with tax software like TurboTax.

Details:

Coinbase, one of the largest and most influential cryptocurrency exchanges, has announced the addition of a new tax centre to its app and website to assist US users in determining how much they may owe the IRS as a consequence of their crypto transactions. The section is intended to collect all taxable transactions in one location to make things easier on tax day.

Although cryptocurrencies such as Bitcoin may appear to be similar to conventional money, the IRS considers digital assets to be property, according to this FAQ from the federal agency. That implies cryptocurrency transactions may need to be recorded as capital gains or losses, which requires keeping track of the value of a cryptocurrency when it is purchased and sold over time. If you purchase and sell on a regular basis, documenting these transactions may rapidly become cumbersome.

Coinbase’s new feature will display “a customised overview of [a customer’s] taxable activities on Coinbase, broken down over time by realised gains/losses and miscellaneous revenue.” This data may then be given to an accountant or utilised with tax software such as TurboTax. If you’ve transferred crypto to other exchanges, wallets, or other DeFi (decentralised finance) services, Coinbase claims CoinTracker will provide tax records for up to 3,000 of these transactions for free.

CNBC reported last year that there are concerns that many of the taxes owed on bitcoin transactions are not being paid. Although confusion over the evolving tax rules regarding cryptocurrencies is one reason for this, another is that exchanges such as Coinbase have historically not provided as much assistance to customers as traditional brokerage houses when it comes to reporting their gains and losses for tax purposes.

The new Coinbase tax page may be displayed directly by clicking the account icon in the top right-hand corner of the dashboard, where “Taxes” will appear as a menu item. The Taxes portion of the app is accessed via the “Profile & Settings” option, which is located at the upper left of the program’s UI. Coinbase plans to offer written instructions and instructional videos in the coming weeks, in addition to the new tools, to clarify bitcoin and digital asset taxation, but for now, this summary from CNET is a good place to start.

Credits: www.theverge.com

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