Coinbase is reportedly collaborating with portfolio tracking and tax calculating startup CoinTracker to simplify tax declarations for crypto loss and gains, with the Internal Revenue Service deadline approaching in three months.
Specifically, the initiative is reportedly an attempt to offer a simplified method to Coinbase users, for reporting their crypto transactions and sales.
Catered to the users based in the US, CoinTracker will reportedly run calculations and complete the particular forms – for instance, Form 8949 and Schedule D, to declare capital gains, losses and assets on income tax returns.
CoinTracker co-founder Chandan Lodha reportedly remarked that the collaboration will enable a “one-click integration” from the Coinbase taxes page, assisting users in doing calculations for crypto gains and losses on the platform. Coinbase Ventures – the firm’s investment-focused division – has reportedly poured an unspecified amount of investments into the platform also.
The IRS is reportedly applying a more serious stance towards Coinbase users, who have not managed to meet reporting requirements for crypto. Despite numerous individuals believing it is not an easy task for the authority to track crypto transactions, sales, profits and otherwise, lying or not fully disclosing such data is classified as tax fraud in the US, and people associated may be subjected to audit, fines and imprisonment.
In December 2020, Coinbase reportedly revealed to the public its initiative to move from issuing 1099-K forms to 1099-MISC forms – an initiative stemmed from the firm’s duties as a registered US-based entity, to declare any crypto income for taxpayers.
The initiative would reportedly mean Coinbase would be able to provide data of crypto taxpayers, who received over $600 in payments throughout 2020 to the IRS.