Coinbase Pro is a platform where you can buy, sell, store, and stake crypto. This platform was previously known as GDAX, and more than 13 million people use it to deal with cryptocurrencies. When you make deals through crypto, you will need to pay taxes. To file your Coinbase taxes, you will need to use the Coinbase Pro Taxes platform, where you will get various details about your taxes.
In this article, you will learn in detail about Coinbase Pro taxes and various essential features of the platform. You will learn the tax reporting processes of the Coinbase Pro platform and how to use the platform to file your crypto taxes. However, you will also get to know about the different tax obligations as well. Hence, to learn more about Coinbase Pro, read on through to the end of the article.
What Is Coinbase Pro?
Coinbase Pro is basically a platform where you can buy, sell, store, and stake any cryptocurrency. From Bitcoin to Ethereum and more, you can invest in more than 130 crypto options. The platform comes with different industry-leading encryption measures. On the Coinbase Pro platform, users have the option to make use of various encryption measures to secure their investments in crypto.
According to the official website of Coinbase Pro, “Coinbase is a secure online platform for buying, selling, transferring, and storing cryptocurrency (crypto). Our mission is to create an open financial system for the world and to be the leading global brand for helping people convert crypto into and out of their local currency.”
Furthermore, you can also find the best cryptocurrency to invest in on this platform by comparing the trends of various cryptocurrencies. In comparison to Coinbase, the Coinbase Pro encryptions have cheaper costs, and there is a wider range of assets for trading.
However, a beginner might find the Coinbase Pro platform lightly difficult to use, as compared to active crypto traders. Due to the presence of a wide assortment of digital currencies on the Coinbase Pro platform, it is actually a good option for active traders. Therefore, if you are a beginner, and want to know how to use Coinbase Pro to buy crypto, then consider reading this article.
Does Coinbase Pro Report To IRS?
The IRS is the administrator and enforcer of US Federal Tax Laws. It is important for every financial platform to report taxes to the IRS. Hence, if you are a Coinbase Pro user in the United States, and you have earned more than $600 either by staking crypto or through rewards, then Coinbase Pro sends you Coinbase tax forms. One of them is the 1099-MISC report to the IRS and to you as well. The 1099-MISC basically helps any user to report their miscellaneous earnings from rewards. However, all taxable income or events must not be informed to the IRS.
Hence, you can see that Coinbase Pro does report to the IRS. Furthermore, since the Coinbase platform lost a summons case in 2016, it meant that they had to share KYC data and Coinbase tax documents with IRS. The information about Coinbase is important since this company owns the Coinbase Pro exchange. It is also despite the fact that the exchange was previously known as GDAX.
How Do Coinbase Pro Report Taxes?
In the United States, crypto is considered a digital asset, and the IRS considers these assets at par with securities, equities, and other important financial assets on which investors invest their capital. Although the crypto you bought is subject to tax provisions, there is a difference.
The taxes related to crypto are based on how you received the crypto payment. Was the crypto earning you had as a result of your income or capital gains? It also depends on how long you hold the crypto on your Coinbase Pro storage, short-term or long-term.
You can learn Coinbase tax information from the Coinbase taxes platform. However, in most cases, the tax documents are not detailed and comprehensive.
According to ZenLedger.com, a tax-returning platform, “Coinbase Pro, for example, can only see transactions that take place on their platform. Coinbase Pro won’t be able to monitor your cost basis and compute your total crypto tax burden if you purchase or sell your bitcoin on a separate platform.”
Taxes For Coinbase Pro – What Are The Tax Obligations For Crypto?
If you buy or sell your cryptocurrencies, you will either experience capital gain or loss, based on the situation and market. In such cases, you will have to pay a tax for the transaction performed as well. This also includes if you sway any crypto with another on the Coinbase Pro platform.
There are many investors who earn crypto as a source of income, and then the transaction comes under personal income. Hence, this income is taxed as per laws.
Tax obligations also include trading fees. These are included in your cost basis and are also excluded from the proceeds. Furthermore, there are some transactions like crypto donations which are sometimes tax deductible. However, in such cases, consult your tax advisor regarding this.
According to the Coinbase Pro official website, all customers in the United States can make use of the Coinbase Taxes platform. There you can find everything needed to file Coinbase Pro taxes. Here, you will also get information about whether your particular Coinbase Pro activity is taxable or not. You can also learn about taxes on your gains and losses, as well as on your earned incomes. You will also get details, including the IRS forms.
Hope this article was helpful for you in getting a better idea of the Coinbase Pro taxes platform. If you want to return your Coinbase Pro taxes, consider using the Coinbase Pro platform first.
However, if you find it difficult, you can also use another tax-paying platform, which will also give you a lot of details about your tax returns against your Coinbase Pro crypto. Do you know of any tax platform from where you can play Coinbase Pro taxes? Share some information for other readers in the comments section below.