Preparing your gains/losses for your 2020 taxes

The IRS federal tax filing deadline has been extended to May 17, 2021.

The way that Coinbase’s US customers need to prepare to file their 2020 crypto cryptocurrency transactions is different than in past seasons. 

For the 2019 tax season, customers using TurboTax or similar filing tools could upload a report generated on Coinbase with certain gains and losses information to respond to the Crypto section of their taxes. This year, this report is not available on Coinbase. 

For the 2020 tax season, the Coinbase.com Transaction history report and the Coinbase Pro Account and Fills Statements are not directly compatible with TurboTax.  

We recommend using a digital tax aggregator, like CoinTracker, to automatically calculate crypto gains/losses by linking their Coinbase account directly. CoinTracker is free up to 25 transactions for Coinbase customers. If you have more than 25 transactions, you can receive a discount. Learn more about this perk

As an alternative, you can manually calculate your gains/losses. This requires that you have tax cost-basis information for the crypto you sold, converted, or sent on Coinbase—see our 2020 Tax Guide for more information.

Manually preparing your gains and losses data 

Here are the recommended steps on how to manually calculate your gains/losses. If you prefer to not do this exercise by yourself, we recommend working with a tax professional or using a digital tax aggregator like CoinTracker

These steps will help you produce a view of your Coinbase.com gains/losses only—this will not include your activity on other platforms. If you also use Coinbase Pro, you will need to pull your Fills Statement and follow these same steps to manually prepare your data before filing your taxes.

1. Go to coinbase.com/reports.

2. Next to Transaction history, click Generate report

3. In the pop-up window, select 2020, All assets, and All transactions in the respective drop-down menus:

     

4. Click Generate report next to CSV report to download the report.

If you work with a CPA or tax professional, they may be able to take this complete report and perform the rest of these steps. If you do not, then please follow the steps below.

To manipulate your transaction history report to be useful for tax reporting purposes:

5. Import your CSV file into Excel or Google Sheets (here’s how to import into Google Sheets) where you can edit the raw data.

6. Filter out or remove any Buys, Receives, Earn, Staking, and USDC Rewards rows as well as some Sends.

  • Why shouldn’t I include Buying and Receiving? You are not taxed on Buying or Receiving and then holding. You are taxed only on selling or converting crypto. In other words, Buys and Receives are not taxable events, so you don’t need these rows in your report.
  • Why shouldn’t I include Earn, Staking, and other rows that show I earned income from crypto? While rewards and fees from Earn, Staking or lending are taxable, they are reported separately from gains and losses. If you made these types of transactions (totalling $600 or more) in 2020, you will receive a 1099-MISC form from us that you can use to report this income, separate from gains and losses. If you received crypto from an Airdrop or fork, you must include that as taxable income on the date that you gain access to it (i.e. the value of the asset on the date Coinbase supports a fork or Airdrop).
  • Which Sends should I remove? To determine whether to include a Send row or not, depends on where you sent the crypto. If you sent it to another address or wallet you own, do not include the Send (this is not a taxable event). If you sent it to an address or wallet you do not own (like a merchant), you should generally keep the Send in your report (as this is a taxable event). Refer to the Notes column to see who (which address) was the recipient of your Sends. 
  • Each row should now represent all the crypto on Coinbase.com that you disposed of in 2020 (either by selling or converting). 

7. Add a column called Date acquired. This is the date at which you originally acquired the crypto you Sold/Converted/Sent in each row.

  • Why? Crypto gains and losses are taxed as capital gains. The short term capital gains tax rate is applied if you’ve held an asset for 1 year or less. The long term capital gains tax rate is applied if you’ve held an asset for more than 1 year. You can determine which tax rate applies once you fill in Date acquired because you already know the Date Sold/Converted/Sent (this is the Timestamp column for your remaining rows).

8. Add a column called Cost-basis. Generally, this is the price at which you acquired the crypto you Sold/Converted/Sent in each row.

  • Why? You owe tax on the difference between the proceeds you received from your Sold/Converted/Sent crypto assets and your cost basis at which you acquired these assets.
  • How do I know the cost-basis for crypto I didn’t buy? For staking/mining/airdops, this is typically the value of the crypto on the date you received (and had dominion and control over) the crypto. For gifts, your cost basis will generally be the same as it was for the person who gave you the gift (e.g., the price at which the gift giver purchased the crypto). 

9. Fill in the blank Date acquired and Cost-basis cells per row. You will need to determine and decide for yourself which Buy or Receive transaction corresponds to each Sell/Convert/Send transaction so that you can assign values to each row in your report.

Once the above is complete, then your report should be ready to use. You may need to manually type in the details in your report to TurboTax or other tax return filing tools. 

Using CoinTracker

Avoid the hassle of manually calculating gains/losses by using CoinTracker. It’s free up to 25 transactions per customer. For paid plans, we've partnered with CoinTracker to get you 10% off. Go to CoinTracker using this link and your discount will be automatically applied at checkout.

You can easily connect your Coinbase account to CoinTracker by selecting Get Started with Coinbase when you sign up. This will provide CoinTracker with read-only access to your Coinbase transactions to give you real time insights in CoinTracker.

This guide is instructive only. Coinbase does not provide tax advice to its customers, and this guide is not intended to provide tax or legal advice on your taxable gains and losses or on your tax reporting obligations. We encourage you to consult with a tax professional to ensure that you have the best and most complete tax advice in preparing and filing your tax return.

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