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Confronting the Elephant in the Room: Crypto Taxes and How Some Platforms Are Addressing Them

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Ask any layperson their views on cryptocurrencies and you’ll likely hear that they’re mainly used for illicit activities and tax evasion. While this is obviously far from the truth, the fact is that tax issues for crypto investors is a problem that keeps rearing its ugly head. There is still a lot of confusion in many jurisdictions as to what constitutes a taxable event, and it is hard for the average investor to fathom the murky complications of accounting for profits and losses to be compliant with regulation.

This has probably gone on for too long, and one crypto startup has designed its offering to address taxation among other use cases. CoinTracking describes itself as an advanced platform for crypto holders to vastly maximize efficiency in several areas including tax.

Tax confusion

While several governments have made progress in clarifying tax issues, for the most part, crypto traders, are left in the dark as to how they can proceed now and in the near future. Consider what Hiroyuki Komiya, an established blockchain consultant, had to say about the regulation in Japan (a more advanced political system):

“The government hasn’t clarified certain details, so you’re left unsure whether you’ve got it right or not.”

If this is the case in a rule-oriented society like Japan, you can imagine the problems that might be faced in other jurisdictions.

As a result, CoinTracking are trying to make all aspects of tax more efficient to deal with as well as providing general analysis of one’s portfolio.

Playing by the rules

The company has developed a platform where users can configure their settings to address all advanced taxation concepts. As per their website: “CoinTracking helps with taxes for your tax declaration of Bitcoins and other digital currencies. According to the methods FIFO, LIFO, HIFO and LOFO, CoinTracking calculates all your trades exact to the cent and prepares them automatically so that they only have to be attached in the tax return.

Our tool is designed to adapt to the laws, financial statements and forms of different countries, such as Capital Gains, Form 8949, the German tax declaration and many more.”

The platform entered development in 2013 when the founder realised how woefully inadequate spreadsheets were for tracking crypto trading activity. 5 years on, the platform boasts over 350,000 active users, and is ramping up a new set of feature releases. In a climate where more scrutiny is being brought to bear on how traders function, CoinTracking is a useful development in making crypto easier to trade and more reputable in the eyes of the wider public.

View article source at: https://www.ccn.com/confronting-the-elephant-in-the-room-crypto-taxes-and-how-some-platforms-are-addressing-them/

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