does coinbase keep track of cost basis

Despite concerns, cryptocurrency exchange Coinbase has opted not to track the cost basis of user transactions, requiring users to manually monitor for tax purposes.

Oct 27, 2024 at 05:22 pm

Does Coinbase Track Cost Basis?

Coinbase is a popular cryptocurrency exchange that allows users to buy, sell, and store digital assets. However, users have raised concerns about whether Coinbase tracks the cost basis of cryptocurrency transactions.

What is Cost Basis?

Cost basis is the original price of an asset when it was acquired. This information is important for tax purposes, as the cost basis determines the amount of capital gains or losses that are subject to taxation.

Does Coinbase Track Cost Basis?

The short answer is: no. As of March 2023, Coinbase does not track the cost basis of user transactions. This means that users are responsible for manually tracking their cost basis for tax purposes.

Why Doesn't Coinbase Track Cost Basis?

Coinbase has not publicly stated why it does not track cost basis. However, there are a few possible reasons:

• Complexity: Tracking cost basis can be a complex and time-consuming process, especially for users with a large number of transactions.
• Lack of Regulation: There is currently no regulation requiring cryptocurrency exchanges to track cost basis.
• Privacy Concerns: Some users may have privacy concerns about Coinbase tracking their cost basis information.

What Users Can Do

Since Coinbase does not track cost basis, users need to take steps to track their own cost basis for tax purposes. This can be done using a spreadsheet, cryptocurrency accounting software, or a third-party service.

There are also a number of online tools available that can help users calculate their cost basis. These tools can be helpful for users with a large number of transactions.

Conclusion

Coinbase does not track the cost basis of user transactions. This means that users are responsible for manually tracking their cost basis for tax purposes. Users can use a variety of methods to track their cost basis, including spreadsheets, cryptocurrency accounting software, and online tools.