The wallet and exchange giant, Coinbase, has announced today that they will provide an updated suite of tools to help users that reside in the USA to report and file their taxes to the IRS. The company is trying to use its enormous resources to ease the pain of tax calculation for its users.
They made the announcement in a post on their blog web page. There, it details the steps that users must follow to get their tax estimate; First, it is important to generate a complete report of all transactions made in the taxable period. In that way, you can have an integral view of all the operations made, (buying or selling).
Then, it advises to summarize reports for all exchanges and calculate your net earnings. It mentions two approaches: the FIFO approach (where you first assets bought are the first assets that are sold) and a second one based on identifying transactions individually. The interesting thing here is that if you only trade on Coinbase, it offers an automatic transcript made by a gain-loss calculator based on the FIFO approach.
Coinbase is trying to educate their users to file and pay their taxes, something that not much people do when they trade with cryptocurrencies. According to concerning reports, the estimate is that more than 95 percent of traders don’t file tax reports regarding cryptocurrency operations. Also, Coinbase has had a spotty relation with the IRS, the USA tax watchdog. Last year, Coinbase delivered the info of 13.000 of its top exchangers to the IRS, and advice them to prepare for legal actions individually. That was the result of a legal battle waged for months. So now Coinbase is, in one way or another, giving an example pushing users to report and file taxes, and helping them to do it right.