Most Crypto traders in countries like the United States must now report their crypto taxes to the IRS and Coinbase pro taxes tool has made easy for all Coinbase users.
If Coinbase Pro user looking to report your crypto taxes to the IRS? Sometimes, most traders need help to report their transactions on the platform.
In this article, we will look at the basics of cryptocurrency taxes and show you how to get your Coinbase Pro tax report in three simple steps.
Coinbase Pro is one of the leading Bitcoin exchanges in the world, offering users advanced options to trade cryptocurrencies with low fees. However, many users need help reporting their transactions on the platform to the IRS.
Cryptocurrency Taxes 101
The Internal Revenue Service (IRS) considers cryptocurrencies to be a form of property that can be taxed on both income and capital gains. You must report your cryptocurrency transactions on your tax return, whether you sold, traded, earned, or spent your crypto.
If you earn cryptocurrency as a source of income, it is also considered regular income and is subject to taxation. For example, if you receive crypto as a payment for either goods or services, as a reward or fee from Coinbase Earn, USDC Rewards, or Staking, or as interest from lending platforms, you must report this as income on your tax return. The amount of income is determined by the fair market value of the crypto at the time of receipt.
Capital Gains Taxes
You could incur capital gains or losses every time you sell your cryptocurrency. This means that whenever you sell your crypto for fiat currency, trade it for another crypto, or use it to buy something, you must calculate your gain or loss and report it on your tax return. The amount of profit or loss is calculated by the difference between your cost basis (the price you paid for the crypto) and your fair market value (the price you sold or traded it for).
How to Get Your Coinbase Pro Tax Report
To report your Coinbase Pro taxes, you must have a complete record of all your cryptocurrency transactions on the platform and any other platform or wallets you use. You must also know each transaction’s cost basis and fair market value. This can be challenging if you have many transactions or transferred your crypto in and out of Coinbase Pro.
Fortunately, some tools can quickly help you get your Coinbase Pro tax report. You can follow these three steps:
Step 1: Download Your Coinbase Pro Transaction History
The first step is downloading your Coinbase Pro transaction history from the platform. The CSV file contains information such as the transaction’s date, type, amount, and price. To do this, follow these steps:
- Go to Coinbase Pro and login your account. In the top right corner, locate your profile symbol and click the arrow next to it.
- Select “Statements” from the dropdown menu. This will lead you to a different page. In the right corner, click the “Generate” button.
- From the dropdown menu, select “Account”.
- Choose the time that you want to download. Select a predefined period (such as 2020) or a custom range.
- Click “Generate Statement”. This will create a file (CSV)that you can download to your computer.
Step 2: Import Your Coinbase Pro Transaction History into a Crypto Tax Software
The second step is to import your Coinbase Pro transaction history into crypto tax software that might assist you in calculating your profits and losses and generate your tax report. There are many crypto tax software available online, such as CoinLedger, Coinpanda, and Koinly. This software allows you to import transactions from multiple platforms and wallets, track your cost basis and fair market value, and create tax forms you must file.
To import your Coinbase Pro transaction history into a crypto tax software, follow these steps:
- Choose a crypto tax software that suits your needs and preferences. You can compare different features and prices online.
- Create an account on the crypto tax software and sign in.
- Find the option to import transactions from Coinbase Pro. You can use an API key or upload the file (CSV) you downloaded in step 1.
- Follow the instructions on the screen to complete the import process.
Step 3: Review Your Coinbase Pro Transactions and Generate Your Tax Report
The third step is to review your Coinbase Pro transactions and generate your tax report using the crypto tax software. This will summarise your income and capital gains or losses from your cryptocurrency transactions on Coinbase Pro and other platforms or wallets you used. You can also download various tax forms you need to file with the IRS, such as Form 8949, Schedule D, Schedule 1, etc.
To review your Coinbase Pro transactions and generate your tax report, follow these steps:
- Go to the dashboard of the crypto tax software and find the section that shows your income and capital gains or losses from your cryptocurrency transactions.
- Review each transaction’s details and ensure they are accurate and complete. You can also edit or delete any transactions that are incorrect or missing.
- Find the option to generate your tax report and choose the year you want to report.
- Download the tax report and forms you must file with the IRS.
Reporting your Coinbase Pro taxes can be daunting, but it doesn’t have to be. By following these three simple steps, you can quickly get your Coinbase Pro tax report and confidently file your taxes. Remember to keep track of all your cryptocurrency transactions throughout the year and use reliable crypto tax software to help you calculate your gains and losses and generate your tax report. Happy trading!