Popular Currency Exchanges Coinbase
Popular Currency Exchanges Coinbase has easy-to-use cryptocurrency exchange and wallet apps. These apps shot to the top of the iPhone most-downloaded free apps in December when Bitcoin surged in price to nearly $20,000. It offers four cryptocurrencies: Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. Just put in your bank details, buy, and the coin is delivered to the wallet provided by your account. Coinbase charges 1.49 percent for UK customers on buys and sells, jumping to 3.99 percent for instant card-based purchases.
Founded in June 2012, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like bitcoin, ethereum, and litecoin. They are based in San Francisco, California.
Currently, they have 10 million+ users and traded $50+ Billion.
Coinbase offer tax tools to make IRS reporting easier. You and your tax professional can reference the steps to prepare your tax filings by visiting Coinbase tax info page.
Customers can create a complete view of all digital asset transactions. Coinbase customers can click here to generate a single report with all buys, sells, sends, and receives of all currencies associated with their Coinbase account.
This report provides your cost basis for all purchases and proceeds from all sales, inclusive of Coinbase fees. This information is necessary to determine your gains/losses. Please be advised that transactions with payment reversals and refunds may not be reflected in this report.
Remember, this report only details transactions associated with your Coinbase account. In order to create a complete view of your digital asset investments, you will need to download similar reports from all other exchanges you have used.
After determining your cost basis, you and your tax professional can calculate your investment gains or losses. Simply put, your gains or losses are calculated by subtracting your cost basis from the proceeds for each sale or exchange.
To date, there is no standard guidance from the IRS on how to apply your cost basis to individual sales or exchanges of digital assets. We’ve seen two common approaches:
- First in first out (FIFO) — This method assumes that the first assets you purchased are also the first assets you sold or exchanged. Your gain/loss is calculated based on the price you paid for the oldest assets in your portfolio, and the asset price at the time of sale or exchange. This is the most common approach for traditional investments.
- Specific Identification (SpecID) — This method relies on investors to specifically identify to their tax professional the assets they sold or exchanged. This is also a common approach for traditional investments but requires significant effort from the investor.
- Note that other approaches to calculate your cost basis may exist. We suggest you contact your tax professional before pursuing alternative approaches.
Adding the gains/losses from all of your sales and exchanges will give you your gain/loss for the year.
See below an example gain/loss calculation. This example illustrates how an investor might account for gains on selling two of five ETH purchased using FIFO and SpecID methodology. This table is illustrative.
Once you have calculated your gains or losses on your digital assets investments, you are ready to file your taxes. Consult your tax professional on how to best report this information in your tax filing.
Popular Currency Exchanges Coinbase – only gain/loss calculator.
For our customers who have only bought or sold digital assets on Coinbase, we offer a tool that automatically calculates your gains or losses based on a first-in-first-out (FIFO) accounting method. Note that FIFO is only one of several methods you can use to calculate your investment performance. You can generate this report here.
This tool provides a preliminary gain/loss calculation to assist our customers, but should not be used as official tax documentation without validating the results with your tax professional. Please be advised that this report will only be accurate for customers who have not transacted outside of Coinbase. Do not use this report if you have:
1. Bought or sold digital assets on another exchange
2. Sent or received digital assets from a non-Coinbase wallet
3. Sent or received digital assets from another exchange (including GDAX)
4. Stored digital assets on an external storage device (i.e., Trezor, Ledger, etc.)
5. Participated in an ICO
6. Previously used a method other than FIFO to determine your gains/losses on digital asset investments
Current Live Price Index for all cryptocurrency.
Disclaimer about Popular Currency Exchanges Coinbase: This post does not constitute legal or tax advice. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved. You are responsible for consulting with your own professional tax advisors concerning specific tax circumstances. Coinbase disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. These tools are intended for Coinbase customers filing as individuals, not businesses.
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