Coinbase: New US Crypto Tax Rules Are Complex, Stablecoin and Gas Fee Reporting May Lead to System "Over-Reporting"

Odaily News Coinbase stated that the rules for the new digital asset tax reporting Form 1099-DA introduced by the U.S. Internal Revenue Service (IRS) are overly cumbersome and could impose unnecessary administrative burdens on a large number of cryptocurrency holders. Lawrence Zlatkin, Vice President of Tax at Coinbase, pointed out that the new rules require reporting transactions involving stablecoins and network gas fees, which are often for very small amounts. Since stablecoin prices are essentially stable and gas fees are typically just a few dollars or even less, reporting such information could lead to system "over-reporting," making the tax system more complex.

It is reported that Coinbase is currently sending Form 1099-DA to millions of U.S. users. This system requires trading platforms to report users' digital asset transaction details to the IRS and provide users with a copy for their own profit/loss reporting. However, for this year's reporting, Coinbase will only report the gross proceeds from digital asset sales to the IRS and will not provide the cost basis. Users need to calculate their actual taxable gains themselves, which may cause confusion for some investors. Coinbase plans to calculate the cost basis for users starting from the next tax year to simplify the reporting process. (Interactivecrypto)