Coinbase introduces a new Cryptocurrency Tax Calculator
The startup launches a new gain/loss tax calculator for U.S. Customers
The startup Coinbase launched a new cryptocurrency tax calculator to calculate gain and loss for U.S. Customers to keep track of their tax requirements. On 13th March 2018, Coinbase published a blogpost explaining the functionality and the purpose of the calculator. The calculator following a first-in-first-out (FIFO) accounting method will generate a report summarizing the capital gains or losses incurred on the platform.
Users of Cryptocurrency Tax Calculator
The tool as mentioned in the blog, comes with a few warnings and limitations to its users. The main objective of the tool is to help out users who have traded on Coinbase exclusively. It is not recommended for those who have traded digital assets on other platforms or initial coin offerings;
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 procedure of using the cryptocurrency tax calculator is fairly simple. First it will help establish a complete view of your trading activity to determine the cost basis. Next it will calculate the gain and losses. And finally, you can file the taxes on your digital assets investments.
The company took a prior step on tax front when earlier in January, the startup notified its clients that they are liable for U.S. capital gains, and going to lengths posting a consistent banner regarding the issue.
The problem with taxation and digital currencies have been an ongoing topic, since 2014 when the U.S. Internal Revenue Service declared digital currencies as a taxable digital asset rather than a currency.
The IRS guidelines are somewhat ambiguous and has received a lot of complaints from professionals. Coinbase showed its awareness on the fact stating, “we understand taxes for digital currency can be complicated”.
Earlier, Coinbase involved in a lawsuit with the IRS who seeked information on U.S. clients with the intention of identifying potential tax avoiders. As per the order of the U.S. district judge in November 2017, the startup will have to send details on about 13,000 clients who did their transactions on the platform during the period of 2013 to 2015.