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Coinbase Launches Cryptocurrency Tax Calculator For U.S. Customers

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Cryptocurrency exchange Coinbase has launched new tax tools for their customers to help them calculate tax on cryptocurrency trading as per the requirements of the U.S. Internal Revenue Service (IRS), it said in a blogpost.

As per the IRS guidelines for reporting digital asset gains, virtual currency is treated as property for federal tax purposes. General tax principles applicable to property transactions apply to transactions using virtual currency.

Coinbase is the biggest crypto exchange in the U.S. and the seventh biggest exchange through transaction volume, as per Coinmarketcap.

The company advises customers to first generate a single report with all buys, sells, sends, and receives of all currencies associated with their Coinbase account using the tool.

This will provide a complete view of all digital asset transactions on a cost basis for all purchases and proceeds for all sales, inclusive of Coinbase fees. The next step is to create a gains or losses report.

Coinbase wrote in the blog post, "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."

Coinbase noted that the tool provides a preliminary gain/loss calculation to assist customers, but should not be used as official tax documentation without validating the results with customer's tax professional.

Coinbase also warned that this report will only be accurate for customers who have not transacted outside of Coinbase.

Regulators around the world are closely watching cryptocurrencies amid concerns over excessive speculation, money laundering and tax evasion.

Meanwhile, Coinbase had been asked in late February to hand over information regarding around 13,000 customers to the IRS, under court order.

They were asked to provide customers' taxpayer ID, personal details including name, birth date, address, and historical transaction records for certain higher-transacting customers during the 2013-2015 period.

by RTTNews Staff Writer

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