Just three months before US citizens can report their cryptocurrencies and losses to the IRS, Coinbase is involved in wallet tracking and tax account platform CoinTracker to make the process easier.
According to CoinTracker, this is an easy way for Coinbase users to report cryptocurrencies and sales. CoinTracker targets US users, and it calculates and fills out certain forms, such as Form 8949 and Form D, to declare profits, losses, and assets on tax returns. It can be used by individuals and accountants or as part of a tax deposit program such as TurboTax.
CoinTracker co-founder Chandan Lodha said the partnership will enable a “one-click integration” of Coinbase’s tax side, allowing users to calculate cryptocurrency gains and losses on the platform. Coinbase Ventures, Coinbase’s investment arm, made an unknown investment in the platform.
In November, Cointelegraph reported that tax authorities have taken a tougher stance against Coinbase users who fail to comply with tax reporting requirements for cryptocurrencies. While some cryptocurrency users may find it difficult for the government to track cryptocurrency transactions, sales, profits, and more, lying or deleting this information is considered tax fraud in the United States and can lead to censorship, fines and imprisonment.
Coinbase announced last month that it had moved from issuing Forms 1099-K to Forms 1099-MISC as part of its legal obligation as a US registered company to declare any crypto income to taxpayers. The move would essentially allow the cryptocurrency exchange to provide taxpayers with information about the IRS for all cryptocurrencies that have received more than $ 600 in payments by 2020.
As the industry grows, tax authorities have become more diligent in investigating cryptocurrencies. A federal agency memo issued in August 2020 states that the United States government treats all cryptocurrencies as taxable income. In December 2020, the IRS asked a question asking US citizens to indicate whether they trade digital assets at the top of their 2020 tax return. A crypto tax specialist at the time noted that anyone who answered unfairly could be charged By perjury to forge information in a government document.
Lodha told Cointelegraph in April 2020 that CoinTracker is “helping to increase the confidence and legitimacy of the cryptocurrency industry as a whole” because it helps regulators see that “the vast majority of cryptocurrencies are used by ordinary people for perfectly legal transactions, and people as well are using cryptocurrencies .– according to taxes.”