As a means of helping clients keep up with U.S. tax requirements, March 12th saw Coinbase, the popular cryptocurrency startup release a gain/loss tax calculator. This comes after the IRS filed a lawsuit against the startup last, as they wanted to get a hold of information on U.S. users and see if any were trying to avoid taxes. The lawsuit resulted in Coinbase sending the info of 14,000 users who made transactions on Coinbase between 2013 and 2015.
The calculator was first brought to light via a blog post that was published on March 6. In the post, Coinbase explained that the calculator would use a first-in-first-out accounting system to produce a report that will profile the capital gains and losses on their platform.
The fact that the calculator is aimed solely at individuals who have traded on Coinbase can be seen as a downside. It isn’t at all recommended to people who trade on other platforms or who have taken part in ICO.
Concerning their new product, the startup stated, “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 release of the tax calculator comes after many earlier attempts by coinbase to push the issue of tax. Back in January, Coinbase sent a reminder to users that made them aware that they are liable for their U.S. gains. They even went as far as posting a banner about the issue on their website.
The issue of taxation was first brought up by the U.S. Internal Revenue Service in 2014. It was then that they stated that cryptocurrecy would be a treated as a taxable form for property. Since then it has been a hot topic.