It's the middle of March and that means Tax time is quickly approaching.
If you are like most American's, this is the time of year that you dread, even more so if you are a cryptocurrency trader.
In most cases taxes are already taken out of your earnings, however, in the case of trading, that onus is mostly on you.
Exchanges are not sending your trading history to the IRS, though Coinbase did send some from users up through 2015, but that is a topic for another day.
In general we have to figure out our reporting requirements when dealing with cryptos.
Coinbase launched a new tool that will at least attempt to make that process slightly easier for you.
If you go to your Coinbase account, you can click on the "Tools" tab and then you will see a new sub heading called "Tax Center".
That should look something like this:
Awesome!
As you can see, you can go back and see all your transactions for any of the last 3 years.
The only downside in all of this is that this tool really only helps you if you both bought and sold your tokens on Coinbase.
Considering that most of the people reading this are on steemit.com blogging to earn steem, it is highly unlikely that your Coinbase holdings were both bought and sold on Coinbase.
Either way though, this is a welcome addition to Coinbase.
The entire release can be seen here:
https://blog.coinbase.com/new-tax-tools-on-coinbase-4d2598544d9e
Tax help for steemit users?
Now all we need is someone to build an app on Steem that will help calculate the taxes owed for steemit.com earnings.
By the way, is there any legitimate claim to be made that the earnings on steemit.com could be classified as a gift for tax purposes?
In the tax code when it is mentioned being paid in crypto for goods/services rendered, that technically isn't what is happening on steemit.com.
There is no specific individual/entity paying you for services rendered.
Some insight on the topic would be much appreciated.
Stay informed my friends.
Follow me: @jrcornel
I have a mixed feeling of this: so sad that decentralized currency is taxed by centralized government; but also happy that it's a step towards expanding usage.
Governments tax absolutely everything and almost every action except breathing (coming soon), but you are right, it is disgusting they are taxing something that hate and don't understand that was created to counter gov's and central banks horrible and failing policies of tapeworm economics.
I would like to suggest that if they are so keen on taxing crypto-assets then let us pay our taxes in crypto, by taxing it they are legitimising it and we should then be able to see on the Blockchain just where our tax-cryptos are going? I wonder if they would mind that?
hahaha I laughed at "everything except breathing (coming soon)." In my head I added "to a theatre near you" haha
I agree, taxes mean government has everslightly more control over something, which is what everybody in the crypto world should be afraid of.
I agree, but I feel like regulation and taxation is necessary for us to continue especially because of recent market performance and ongoing FUD. The decentralization revolution will need to be put on hold.
I feel the same way. I'm also sad that doing crypto taxes is complicated for me and gives me nightmares lol.
That's nice of them, even if it's a bit LATE. I've already done my taxes and I claimed all my crypto transactions. It sure would have been nice to have this a month ago.
here are a few things i have either wrote or rebloged over the past month or so. you will find them very helpfull
https://steemit.com/steemit/@louisthomas/226w4x3i
https://steemit.com/steem/@doomsdaychassis/gearing-up-for-filing-taxes-in-2018
https://steemit.com/bitcon/@the-bitcoin-dood/an-afternoon-at-the-accountants-crypto-taxes
read all 3 and you should be pretty good to go on where and how to gather the required info as painlessly as possible. hope this helps
sorry for the self upvote but i was trying to get this where it can be seen for the information contained.
Perfect, thank you for the info!
no problem. feel free to use it how ever you wish.
Thanks, totally fine to upvote yourself to be seen! Important message, thanks for sharing. I'll check these out when I do my dreaded taxes...
Thought I would share my resources:
Here's my peer review of the new Coinbase tool:
https://steemit.com/bitcoin/@cryptotax/peer-review-of-coinbase-s-tax-report
Regarding Steem, the entire Part I-B – U.S. Tax Consequences of Performing Services for Crypto
https://steemit.com/money/@cryptotax/crypto-tax-series-e-book-february-2018-edition-u-s
Regarding the "gift" argument, it's a fair consideration to address, here is my take:
Disclaimer (as with all my other tax articles): Disclaimer: This series contains general discussion of U.S. taxes in a developing and unclear area of tax law. As always, you should consult your own tax advisor in your jurisdiction to determine your specific situation as this is not personal advice; and consider any future guidance by the Congress/IRS after the date of this article. Under Circular 230 to the extent it applies, this article cannot be used or relied on to avoid any tax or penalties in the U.S., its States or any other jurisdictions. This post does not create a client relationship between the author and the reader.
Interesting, and very helpful. Thanks for the info.
Just to follow up with some statutory precedent to back up my claims, here is a court case where the IRS argued, and courts agreed, that "free money" sent to a radio show host was not a gift, rather taxable income, because the radio host's operations were a business and it was not practical/possible to get verification of the intent of each of the persons who sent the money.
https://law.justia.com/cases/federal/appellate-courts/F2/219/834/264681/
Disclaimer (as with all my other tax articles): Disclaimer: This series contains general discussion of U.S. taxes in a developing and unclear area of tax law. As always, you should consult your own tax advisor in your jurisdiction to determine your specific situation as this is not personal advice; and consider any future guidance by the Congress/IRS after the date of this article. Under Circular 230 to the extent it applies, this article cannot be used or relied on to avoid any tax or penalties in the U.S., its States or any other jurisdictions. This post does not create a client relationship between the author and the reader.
Is this tool just for US Residents?! cannot find on my coinbase site (UK)
This is an interesting development. I hope the debate about this "regulations" will end soon. They should make up their minds or it won't move forward.
That may be the motive with dragging out the talk on regulations, every time there is a piece of news regarding regulations, "FUD!" gets screamed on all crypto news sites and crypto takes a dive.
Perfect, thank you for the good info!
It's interesting to see a tax tool added to Coinbase. I know there was a lot of confusion surrounding the tax question.
Yep here we go the government wants there peice of the pie
Good post @jrcornel
Nice
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very good information in the tax case, thanks for sharing information, I like it
Timing is everything LOL
Will it work for all countries or is it specifically US centered ?
Helpful, thanks.
~ljl~
coinbase irs taxes news
Thank you for the post @jrcornel The coinbase money conversion is actually a good tool which can help an easy conversion of money in cryptos to the currencies locally available and locally used.
Thank you!
So coinbase has launched theirs already. The tax laws is just a necessary evil that has to be implemented to avoid legal consequences. Waiting to see how fast Steemit Inc will come up with one.
This is very informative and I am not looking forward to the day I have to figure it all out. This year should be fine but next year sounds complicated.
Lovely post. I love your explicit explanation...
"The only downside in all of this is that this tool really only helps you if you both bought and sold your tokens on Coinbase." Thanks
really curious to see how tax law will affect crypto gains.
Coinbase should add Ripple lol!
can only use if you've never purchased outside of coinbase
Reading this post even gave me anxiety just thinking about it haha. I'm glad there are tax tools, but still...I have a fear that I'm going to go to jail and the IRS is gonna arrest me for being bad at math.
I literally just need to have a normal job just so that all I have to do is fill out a W2 form haha life would be so much easier.
Do the tools take into account what you actually earned vs. what you spent? Like if you promoted a post (I've done it before...not all the time, but occasionally. Don't worry, I give back to the community, always!)
Thanks for sharing...even though I'm having a mild panic attack now lol