Crypto exchange platform, Coinbase has begun plans to add a tax centre on all of its platforms to help its U.S. based based users figure out how much tax they owe the Internal Revenue Service (IRS) from their crypto dealings and transactions.
The feature is made in such a way that, when a tax day beckons, the tax centre section will bring together all transactions made, assembling them all together in one space to align and facilitate their tax duties.
According to the federal agency’s FAQ, the IRS considers decentralized assets as property with monetary value, as the leading cryptocurrencies in the digital currency market like Bitcoin and Ethereum can be seen as having the same pecuniary value as fiat money and thus the tax system has to indicate same value as cash and other properties.
The IRS thus considers all crypto transactions as capital gains and should be reported as such. Most investors have experience sending in a free tax return each year. It is on that very same tax return that crypto transactions are reported. In doing so, investors also establish a record of the asset’s value when bought and sold throughout time.
Coinbase recognizes that the newly introduced section will show “a personalized summary of [a customer’s] taxable activity on Coinbase, broken out over time by realized gains/losses and miscellaneous income.”
After that, the accrued data will either be shared with a crypto/tax-specialized accountant or implemented into tax software like TurboTax. Coinbase also pointed out a scenario that involves users transferring crypto to external exchanges, wallets, or other decentralized finance (DeFi) services, noting that they will also be able to receive tax reports covering an estimate of 3,000 transactions with CoinTracker, for free.
The cryptocurrency exchange’s tax section can be accessed by customers if they click on the account’s profile icon at the top right-hand corner of the interface and once the ‘Taxes’ feature comes up on the menu item, it can be accessed to receive reports.
In the application mode, users can gain access to the ‘Taxes’ section when they click on the ‘Profile and Settings’ menu which can be accessed from the top left side of the application’s interface.
It should be noted that the Coinbase Global Inc. is planning to develop written guidelines and assistance videos in the coming weeks to enlighten the public on how cryptocurrency and digital assets taxes works.
The company who as at March last year was the largest cryptocurrency exchange in the United States by trading volume, will seek to break new grounds with new features and the introduction of a tax centre will be seen as one of many.