Coinbase Integrates TurboTax To Help US Clients File Crypto Taxes (#GotBitcoin?)

Coinbase customers who need to file taxes in the U.S. this year can get a boost from TurboTax, the tax-filing software offered by Intuit Consumer Tax Group. Coinbase Integrates TurboTax To Help US Clients File Crypto Taxes (#GotBitcoin?)

The companies announced Tuesday that they were teaming up to allow Coinbase and Coinbase Pro clients upload their transactions, gains and losses in 2018 directly to TurboTax Premier, one of the tax firm’s products. Coinbase customers can upload as many as 100 transactions at once, according to a press statement from Coinbase.

Coinbase Integrates TurboTax to Help US Clients File Crypto Taxes (#GotBitcoin?)

The integration will work directly through Coinbase’s retail platform, or its Android and iOS apps, the exchange said.

TurboTax Premier will then help customers determine how to file their taxes from the last year. Any customers who need additional assistance can tap certified public accountants or enrolled agents at Intuit.

Intuit noted that “not every cryptocurrency transaction constitutes a taxable event, which is why we have tons of guidance to assist you in understanding and selecting which transactions are taxable while you are in TurboTax Premier.”

In particular, Intuit indicated that customers who converted cryptocurrencies to fiat, sold cryptocurrencies, spent it to pay for goods or services, or received free coins through a fork or airdrop will need to report that as income.

The list of transactions that are not taxable include customers who bought cryptocurrencies and have not yet sold, gifted cryptocurrencies (with each gift valuing less than $15,000 per recipient) or purchased cryptocurrencies with a Self-Directed IRA or Solo 401(k), the release continued.

In addition to working with TurboTax and CoinTracker, Coinbase noted that it was also launching a tax resource center and publishing a “Crypto and Bitcoin Taxes in the U.S.” guide for 2018 to help its customers understand any tax obligations they may have.

That being said, Coinbase noted that it “is not authorized to give tax advice,” and recommended that customers reach out to a tax professional for questions they may have about their specific situations.

Client Aid Effort

However, to further help customers, Coinbase is integrating with CoinTracker, a Y Combinator-backed crypto and bitcoin tax software manager built by former Google employees.

CoinTracker said in its own release that it would help customers aggregate necessary transaction data across “all wallets and exchanges” that they may use, effectively summarizing all transaction activity for 2018.

In a statement, CoinTracker co-founder Chandan Lodha said his team believes an open financial system will improve the world, adding:

“We can’t have an open financial system if it is too difficult to use, or restricted to certain groups. Therefore, we have a simple mission: make cryptocurrency easier to use. We are starting by tackling cryptocurrency taxes.”

The company supports more than 2,500 cryptocurrencies and has automated integrations for 20 of the largest crypto exchanges by volume. The platform is also tracking more than $200 million in crypto assets, CoinTracker said.

In addition to CoinTracker, Intuit is also partnering with crypto tax startups Bitcoin.tax, BitTaxer and CryptoTrader.tax to further aid customers.

Brennan Snow, co-founder at BitTaxer, told CoinDesk that he hopes the partnership will help Americans claim losses from their crypto holdings, noting that “CreditKarma projected that of the $5.1b in BTC losses for Americans last year, only $1.7b will be claimed.”

This may be due to a lack of understanding, he said, a hole he hopes the integrations will solve.

Updated: 2-26-2021

Crypto Boom Vaults Coinbase Founder Into Ranks of Mega-Rich

Working at Airbnb Inc. allowed Brian Armstrong to see the difficulties of handling payments from around the world.

That led to the idea of creating a digital wallet to hold Bitcoin, which later became Coinbase Global Inc. The biggest U.S. crypto exchange is now going public in a direct listing, and Armstrong is one of the biggest winners.

Coinbase’s co-founder has become a billionaire but estimates of his fortune vary, underscoring the wild price swings of cryptocurrencies. His stake is worth $7 billion to about $15 billion, based on recent private share sales that people familiar with the matter have said valued Coinbase at as much as $100 billion.

Either way, that’s enough to put Armstrong among the world’s 500 richest people, according to the Bloomberg Billionaires Index.

Former Goldman Sachs Group Inc. currencies trader Fred Ehrsam, who joined Armstrong soon after he created the digital wallet, owns a stake worth more than $2 billion, according to Bloomberg’s calculations.

“Trading and speculation were the first major use cases to take off in cryptocurrency, just like people rushed to buy domain names in the early days of the internet,” Armstrong, 38, wrote in a letter included in Coinbase’s filing with the U.S. Securities and Exchange Commission. “But we’re now seeing cryptocurrency evolve into something much more important.”

Profitable Year

Coinbase’s public listing is another milestone putting crypto further into the mainstream. The higher estimates of Armstrong’s fortune exceed those of Twitter Inc. founder Jack Dorsey and Snap Inc. Chief Executive Officer Evan Spiegel, according to the wealth index. Bitcoin has surged more than 400% over the past year and hit a peak earlier this month before retreating.

Coinbase swung to a profit of $322 million in 2020 from a loss the previous year, with transaction fees on its exchange accounting for most of the $1.14 billion in net revenue, according to the registry filing. It’s also facing U.S. federal and state investigations, highlighting the headaches of operating in the crypto industry.

Coinbase isn’t the only company making money off digital currency. Billionaire Mike Novogratz’s crypto-focused merchant bank said Wednesday it expects to report income of about $325 million for the fourth quarter after the value of Bitcoin and other holdings soared. MicroStrategy Inc.’s stock, meanwhile, has surged more than 300% since the enterprise-software maker started buying Bitcoin as part of its corporate strategy.

“With 30% of its volume from Bitcoin, and the remainder mostly tied to cryptocurrencies that track it, Coinbase will face the related volatility,” Bloomberg Intelligence analyst Julie Chariell said. “But the impact on revenue can be half as much, since Coinbase makes money on both sides of the trade.”

Goldman Connection

Armstrong grew up in San Jose, California, and studied economics and computer science at Rice University in Houston. He worked in information technology for Deloitte & Touche before returning to an education company he founded while in college. He joined Airbnb in 2011, and set up Coinbase the following year.

Ehrsam came across Armstrong’s work online and traveled to meet him in San Francisco, where they initially ran Coinbase out of a two-bedroom apartment.

“We decided to work on something for a week,” Armstrong told Bloomberg in 2014.

Other major investors include Andreessen Horowitz, Chase Coleman’s Tiger Global Management and Ribbit Capital, one of the investment firms that provided emergency funds to online brokerage Robinhood Markets earlier this year.

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Coinbase Integrates TurboTax To Help US Clients File Crypto Taxes (#GotBitcoin?)

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