In the United States, the Internal Revenue Service (IRS) will be knocking cryptocurrency users’ doors explaining that it is mandatory to inform crypto trades and pay the related taxes on them. Investors, holders, and other individuals must be compliant with this issue.
However, cryptocurrency traders might have a difficult time checking all the trades they’ve made during the last year. Crypto-to-crypto and crypto-to-fiat trades trigger a taxable event. Coinbase, one of the most used crypto platforms in the market has integrated Turbo Tax to simplify tax filings.
Turbo Tax has also included a new feature called “I sold or Traded Cryptocurrency.” With it, there will be several traders ready to reduce their work and process checking and filling all their taxes online. Users will not be charged a cent for these services, however, they will have to create an account in order to have access to this feature.
The site provides an easy way to track trades that allows users to take less time filing their papers. There is just one problem with this platform. Day traders will have some issues with it since Turbo Tax only provides users with the possibility to complete 100 trades. In the past, users could register 1,000 and 500 trades. This number is now reduced to 100.
There are some things to take into consideration when filing taxes. For example, cryptocurrency donations to IRS certified charities is not a taxable event. Furthermore, gifting cryptocurrencies to someone in virtual currencies is a non-taxable event. However, this must include the necessary documents proving that the users are effectively donating the funds.
The company says that hiding assets by purchasing other digital currencies such as Monero (XRM) are tax evasion and a federal offense. Coinbase has also been providing information to regulatory agencies in the United States regarding its users and the funds they manage in the platform.
Monero or Zcash (ZEC) are digital currencies that focus on privacy and protect users’ information including the funds stored and transacted.