Filing taxes on Coinbase
TokenTax connects to Coinbase for easy crypto-currency trade tracking and tax filing.
How do Coinbase taxes work?
Coinbase is one of the most popular crypto exchanges for buying and selling crypto with fiat currency, and, as a result, Coinbase tax reporting is very important. Anyone who invests in cryptocurrencies should include all crypto transactions in their crypto tax calculations.
While they supply customers with a Coinbase tax calculator tool as well as Coinbase tax forms, these calculations are only accurate if you only ever bought, sold, and held crypto on Coinbase.
Why can’t Coinbase always accurately calculate crypto taxes?
Many Coinbase customers have used an exchange other than Coinbase, such as Binance. Perhaps you bought a bit of crypto from a friend, or used crypto to purchase goods or services. The issue is that Coinbase’s tax information only extends as far as any activity you’ve done on Coinbase. They are unable to know what cryptocurrency transactions you had on other platforms as well any activity off-exchange.
Traditional brokers, like the ones you’d trade stocks or forex with, are able to track your holdings so that they can issue you a 1099-B or Form 8949. With digital currency, you can easily transfer your assets anywhere, well beyond the purview of Coinbase, meaning they may not have vital information like the cost basis (original price paid) for crypto you sell.
While this freedom is one of the many benefits of cryptocurrency, it also means that you’re responsible for keeping track of all your transactions across all crypto platforms, especially considering that crypto to crypto trades are taxable events.
Bought or sold crypto on another exchange
Sent or received crypto from a non-Coinbase source, like another exchange
Stored crypto in a wallet or sent or received crypto from a wallet
Participated in an ICO
Previously used a method other than FIFO to calculate your gains/losses.
If you’ve only ever bought, sold, and held crypto on Coinbase, then you can just use the Coinbase tax documents that they provide. Otherwise, It’s best you use a crypto tax calculator that can aggregate all of your transactions into one place and then calculate your total gain/loss.
How do I calculate my full crypto taxes?
Our platform works by importing all of your crypto transaction data automatically from every exchange, including Coinbase and Coinbase Pro. It then calculates your capital gains and losses via multiple accounting methods, like FIFO, LIFO, and Minimization. Finally, you can export your tax forms and add them to your tax return.
What if I got a 1099-K from Coinbase?
Many Coinbase users received an IRS Form 1099-K. This form details the overall volume of transactions made on Coinbase, whether you were buying, selling, or transferring assets off the exchange.
For many, the number may seem shockingly high, but there’s no need to worry: it’s just an indication of the volume of crypto transacted on Coinbase, and it doesn’t necessarily indicate your total profits, losses, or tax liability.
Typically when you receive a tax form, the IRS receives a copy of it as well — meaning that if you received a 1099-K, so did the IRS. This indicates that it’s especially important that you properly file your crypto taxes, as the IRS is aware of your crypto activity. People have received IRS letters and notices about their crypto, and the IRS is likely using the 1099-K as a source of information to know who has been transacting in crypto.
How do Coinbase Bitcoin Cash taxes work?
If you were holding Bitcoin on Coinbase when the Bitcoin Cash (BCH) hard fork occurred, then you may have automatically received BCH in your wallet. Per the IRS crypto tax FAQ, assets received in hard forks like BCH are to be recognized as ordinary income.
Since BCH acquired in the hard fork is recognized as ordinary income, this means that you are liable for tax on total fair market value of the BCH received, at the time of which you came under control of the asset. This also establishes your cost basis as said market value. When you sell, trade, or spend the BCH, you recognize any gain or loss on the asset with this fair market value cost basis in mind.
Connecting Coinbase with TokenTax
We connect to Coinbase with OAuth2
On the TokenTax API import page (https://tokentax.co/import), click Authorize with Coinbase.
You'll be taken to an authorization page on Coinbase.com.
If prompted, log in to your Coinbase account.
Click Authorize. This will connect Coinbase to TokenTax.
If you'd like to instead connect with an API key, you can find instructions on our API import help center page.
Uploading a Coinbase CSV with TokenTax
Click New Report. Set the type to Buys/Sells/Merchant Payouts.
Important: We do not accept Coinbase tax reports. Please be sure to upload only your Buys/Sells/Merchant payouts.
Select the coin you have traded. Coinbase does not list all trades in one file, so you must repeat these steps with each coin you have traded with.
For the time range, select All History.
Frequently Asked Questions
How Crypto Taxes Work: Our Getting Started Guide
Check out our 2019 crypto tax guide. TokenTax makes it easy: automatically import your crypto trading from any exchange and generate the required crypto tax forms!
How Does TokenTax Work?
A quick rundown of how TokenTax works and why we are the top cryptocurrency tax software. Import your crypto trading from any exchange and easily create the required tax forms.
TokenTax does the work so you don’t have to.
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