Coinbase criticizes new US crypto tax reporting rules as complex and redundant, potentially increasing the burden on retail investors

Deep Tide TechFlow News, March 8 — According to InteractiveCrypto, Coinbase stated that the IRS’s new digital asset tax reporting form 1099-DA is overly complicated and could impose unnecessary administrative burdens on 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 these details could lead to “over-reporting” and make the tax system more complex.

It is reported that Coinbase is currently 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 for some investors. Coinbase plans to start calculating the cost basis for users beginning next tax year to simplify the reporting process.