Coinbase has added new tax features for its customers. The new features are aimed at simplifying the often complex process of paying tax and come with a reminder that gains made from digital currencies are taxable in the US. Under IRS guidance virtual currencies are treated as property, meaning that investors must pay taxes adjusted to the fair market value of the asset at the time of each transaction. It’s a process that Coinbase has tried to make easier in the past, providing a complete report of all transactions from which investors can work out their profit and loss.
Today’s update goes one step further, however, and gives investors a one-click tax solution. Using the new first-in-first-out tool it’s possible to generate a total profit/loss figure based on historical price data, the figure that tax authorities need to see. However, Coinbase stress that they are not providing tax advice and customers should consult professionals before taking any action.
It’s important to note that the new tool is only of use to customers who have solely used Coinbase for their digital asset investments. If they have participated in an ICO or sent funds to a private wallet or another exchange (including GDAX – Coinbase’s back end platform), the tool will not function accurately, and they will be required to work out the figure manually.