Rich by Coin

Coinbase stated that the IRS’s newly introduced digital asset tax reporting form 1099-DA rules are overly complicated and may impose unnecessary administrative burdens on a large number of cryptocurrency holders. Coinbase’s Vice President of Tax, Lawrence Zlatkin, pointed out that the new regulations require reporting small transactions such as stablecoin trades and network gas fees, while stablecoins themselves have relatively stable prices and gas fees are usually only a few dollars or even lower. Reporting such information could lead to ‘over-reporting’ in the system, making the tax framework more complex. It is reported that Coinbase is currently sending 1099-DA forms to millions of users in the U.S.

This system requires trading platforms to report users’ digital asset transactions to the IRS and provide users with a copy for their own reporting of gains and losses. However, in this year’s reporting, Coinbase will only report the total gross proceeds from digital asset sales to the IRS and will not provide the cost basis, requiring users to calculate their actual taxable gains themselves. This may lead to confusion among some investors, and Coinbase plans to calculate the cost basis for users starting from the next tax year to simplify the reporting process.