Crypto Startup, Coinbase just launched a new loss/gain calculator to aid the tax requirements of its users.
A blog post published by the firm on Tuesday explained the use of the calculator. It stated that the tool could be used for generating reports outlining the user’s capital gains and losses. The tool uses what Coinbase referred to as the first-in-first-out method of accounting.
Is The Tax Calculator For Coinbase Users Only?
While it may have been a good idea for the tool to work on all platforms, Coinbase revealed that it was created exclusively for those who trade on its platform. It is not meant for those who bought assets from other sources or take part in initial coin offerings.
According to the post:
“Our tax calculator tool is not intended to replace official documentation. It is only meant to help our users in determining their preliminary losses and gains. You should only use its reports as an official document after you have validated the results with your tax advisor.”
The release of this calculator comes after a tax front that was set up by Coinbase earlier. You’ll recall that in January, the startup started a campaign to remind its users that they are liable to pay taxes.
Ever since 2014 when the United States Internal Revenue Service announced that digital assets were taxable as property and not currency, issues regarding cryptocurrency and taxation have been rather contentious.
Concerned about the issue, Coinbase, in a new blog states that it understands the concept of taxes for digital currencies. This is no surprise since the startup is currently a target for a lawsuit by the IRS. This was after it tried to sniff out cryptocurrency tax avoiders. The startup is required to send out the information of over 13,000 users who made transactions on its platform between 2013 and 2015.