Coinbase: New US crypto tax regulations are complex; reporting stablecoins and Gas fees may lead to system "over-reporting"

Crypto news: Coinbase states that the IRS’s new digital asset tax reporting form 1099-DA is too complicated and may create unnecessary administrative burdens for many cryptocurrency holders. Coinbase Vice President of Tax Lawrence Zlatkin pointed out that the new rules require reporting small transactions such as stablecoin trades and network gas fees. Since stablecoins generally have stable prices and gas fees are usually only a few dollars or less, reporting this information could lead to “over-reporting” and make the tax system more complex. Currently, Coinbase is sending 1099-DA forms to millions of U.S. users. This system requires trading platforms to report users’ digital asset transactions to the IRS and provide users with copies for their own tax reporting. However, for this year’s filings, Coinbase will only report the gross proceeds from digital asset sales to the IRS and will not provide the cost basis. Users will need to calculate their taxable gains themselves, which could cause confusion among some investors. Coinbase plans to start calculating cost basis for users from the next tax year to simplify the reporting process.