Popular cryptocurrency exchange Coinbase has launched a tax solution dubbed Coinbase Tax Center to enable its customers to better understand and file their crypto taxes without hassles.
Announcing the development in a blog post, Coinbase said the move will allow its customers to view their crypto taxes on one platform in order to determine whether they are owing to the Internal Revenue Services (IRS) and how much that is being owed.
Customers will not be required to pay a dime for the service throughout their activities on the San Francisco-based exchange.
However, the exchange said it will generate tax reports of up to 3,000 cryptocurrency transactions that involve “sending or receiving crypto from Coinbase Pro or external wallets.”
Tax season is coming 💼
We’re here to make filing your crypto taxes easier 👇https://t.co/ZOaUPJTeHR
— Coinbase (@coinbase) January 24, 2022
“This tax season, we’re introducing a tax center so customers can understand and file their crypto taxes with more ease and confidence. Customers will see all of their taxable activity in one place to determine if they owe taxes, and how much.”
The exchange further writes:
“We’re simplifying the process by showing each customer a personalized summary of their taxable activity on Coinbase, broken out over time by realized gains/losses and miscellaneous income. Customers can use these amounts to prepare and file their taxes either with their personal accountants or directly with tax prep software.”
IRS Poised on Taxing Crypto Gains
Last year, the IRS demanded that U.S. residents report their crypto sales, conversions, and payments, to enable the authorities to effectively levy a tax on these transactions.
Crypto users have had trouble complying with the directive since they do not know which transactions are considered taxable, coupled with the stress of manually calculating their gains and losses.
With the Coinbase Tax Center, customers will have a personalized summary of their taxable activities on the platform, the announcement adds.