Coinbase has come up with a new tool that is a cryptocurrency tax calculator to aid its users to follow the US tax requirements. However, if you are not a Coinbase exchange or wallet user along with being an ICO participator and non-FIFO method user, then, this tool is not for you.
Also, read… Lawsuits Against Coinbase Insider Trading & Stealing Customer Funds
Coinbase introduces cryptocurrency tax calculator
After announcing its plans to launch an index fund for cryptocurrency market, one of the most popular exchange Coinbase is now introducing a gain or loss calculating tool. The move has been an effort to help users with the US tax requirements.
In his official blog post, the company explained that the users can utilize the calculator to generate a report that will outline their capital gains or losses through the FIFO i.e. first-in-first-out accounting method.
The move is a continuation of Coinbase’s earlier step in January where it reminded its users that they are liable for US capital gains and need to pay their taxes. Ever since the Internal Revenue Service of US has announced that assets like cryptocurrencies would be treated as taxable properties instead of currency, the taxation on cryptocurrencies have been a topic of debate.
But it’s coinbase users exclusively…
However, there are a few shortcomings here as Coinbase point out that you can’t use this report if you are not a Coinbase user.
So, if you are engaged with other exchanges including GDAX: and wallet or stored your digital assets on an external storage device, this tool is not for you. Moreover, if you have participated in an ICO or used any other method than FIFO to find the gain or losses on your cryptocurrency investments, this ain’t for you.
The company also cautions its users that:
“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.”
Coinbase IRS connection…
In its blog, Coinbase has not been clear on the IRS guidance and further mentions
“we understand taxes for digital currency can be complicated.”
Given how the IRS asked for the records of its 13,000 users last month, this ambiguity raises concerns and a lot more questions.
After receiving the orders, the firm then sends the information of its users to the IRS that was working to find the potential tax evaders.
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