Cryptocurrency tax calculator launched in US
WASHINGTON: Cryptocurrency startup Coinbase has launched a new calculating tool as part of an effort to help its user to keep up with US tax requirements.
In a blog post published on Tuesday, the firm explained that the calculator can be used to generate a report which outlines their capital gains (or losses) on its platform, using a first-in-first-out (FIFO) accounting method.
The tool comes with a few caveats, however, namely that it’s primarily aimed at users who have bought and sold on Coinbase exclusively – and isn’t recommended for those who have purchased digital assets elsewhere or participated in an initial coin offering, per the blog.
“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 startup also cautioned.
Its release follows an earlier step by Coinbase on the tax front, when, in January, the startup reminded its users that they are liable for US capital gains, even going as far as posting a consistent banner about the issue.
The issue of taxation and cryptocurrencies has always been something of a contentious topic, ever since the US Internal Revenue Service announced in 2014 that it would treat such assets as a taxable form of property rather than, say, a currency.