In a move to help the U S user base keep up with U.S. tax requirements Cryptocurrency startup Coinbase has launched a new gain/loss calculating tool
The newly formed calculator can be used to generate a report which outlines their capital gains (or losses) on its platform, using a first-in-first-out (FIFO) accounting method explained by the firm in a blog post.
The company said “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.”
Another method Specific Identification (SpecID). This ‘relies on investors to specifically identify to their tax professional the assets they sold or exchanged is also in consideration before launching the calculator.
For this method exchange said
This is also a common approach for traditional investments but requires significant effort from the investor.
The company said “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.”
Concerns over the ambiguity of the IRS guidance – in its new blog, Coinbase itself writes that “we understand taxes for digital currency can be complicated” – have fueled complaints from professional circles.