With just three months until the deadline for US citizens to report their crypto gains and losses to the Internal Revenue Service, Coinbase has partnered with CoinTracker to make the process easier.
According to CoinTracker, it is an easy way for Coinbase users to report their crypto transactions and sales. CoinTracker is aimed at US users and will calculate and complete the specific forms – for example, Form 8949 and Schedule D – to declare capital gains, losses, and assets on income tax returns. It can be used by individuals and accountants or as part of a tax filing software program such as TurboTax.
CoinTracker co-founder Chandan Lodha said the partnership would enable a “one-click integration” from the Coinbase tax page, allowing users to calculate crypto profits and losses on the platform. Coinbase’s investment arm, Coinbase Ventures, has made an unnamed investment in the platform.
Cointelegraph reported in November that the IRS was take a stronger position against Coinbase users that do not meet crypto tax filing requirements. While some crypto users believe it is difficult for the government to track crypto transactions, sales, profits and otherwise, in the United States lying or omitting such information is considered tax fraud and may result in an audit, fines and imprisonment.
Last month, Coinbase announced it had switched from issuing 1099-K forms to 1099-MISC forms as part of its legal obligation as a US registered company to declare crypto income for taxpayers. This move would essentially be the crypto exchange to provide information about the taxpayer to the IRS for any crypto user who received more than $ 600 in payments in 2020.
The IRS has become more diligent in researching crypto as the industry grows. A federal agency memorandum released in August 2020 reveals that the U.S. government takes into account all crypto payments as taxable income. In December 2020, the IRS posted a question asking US citizens to disclose if they had interacted with digital assets at the top of their 2020 income tax return. A crypto tax specialist noted at the time that anyone who answered unfairly could potentially be charged with perjury for falsifying information on a government document.
Lodha told Cointelegraph in April 2020 that CoinTracker is “helping to increase the trust and legitimacy of the cryptocurrency industry as a whole” as it helps regulators to see that “the vast majority of cryptocurrency use is used by common people for fully legal transactions and that people comply with the crypto tax. ”