Are you a Coinbase Pro user looking to file your crypto taxes?
Coinbase Pro is one of the most popular cryptocurrency exchanges in the world. However, even serious traders often feel confused about how to report their transactions on the platform.
In this guide, we’ll share the basics of how cryptocurrency is taxed and break down a simple 3-step process to help you report your Coinbase Pro taxes to the IRS.
In 2015, Coinbase started a new platform for dedicated crypto traders. The platform was originally called GDAX, but changed its name to Coinbase Pro in 2018. The platform offered users advanced options to trade cryptocurrencies and low trading fees.
In 2022, Coinbase sunsetted Coinbase Pro. Many of the platform’s features are now available on Coinbase Advanced Trade.
To understand how much you’ll be paying in taxes on your Coinbase Pro transactions, let’s review the basics of cryptocurrency taxes.
The IRS considers cryptocurrency a form of property that is subject to both income and capital gains tax.
Income tax: If you earn cryptocurrency as a form of income, this is considered ordinary income and will be taxed accordingly. Earning cryptocurrency interest would fall into this category.
Capital gains tax: You incur capital gains or losses every time you dispose of your cryptocurrency. Selling your cryptocurrency or trading it for another cryptocurrency on Coinbase Pro would fall under this category.
For more information, check out our complete guide to cryptocurrency taxes.
It’s important to remember that this form alone is not enough to report your taxes. The 1099-MISC is meant to help users report miscellaneous income from rewards, but it does not show every taxable event — such as your capital gains and losses from cryptocurrency disposals.
In the future, all exchanges like Coinbase Pro will need to provide more comprehensive tax reporting information to users and the IRS. The 2021 American infrastructure bill requires parties facilitating cryptocurrency transactions to submit 1099 forms that report capital gains and losses.
Coinbase Pro does provide you with a record of your cryptocurrency transactions.
However, cryptocurrency exchanges have trouble tracking your gains, losses, and income if you’ve transferred your cryptocurrency into or out of the platform. In cases like this, your exchange won’t know the original cost basis of your assets — which means it may have trouble calculating your gains and losses.
To get a complete record of your entire cryptocurrency transaction history, we recommend using crypto tax software. CoinLedger can aggregate your transactions across different wallets and exchanges to help you easily report your cryptocurrency taxes.
While you can no longer make transactions on your Coinbase Pro account, you can still upload your transaction history to CoinLedger and watch the platform automatically calculate your taxes and generate your necessary tax forms.
Here’s how you can include all of your Coinbase Pro transactions on your tax report within minutes:
1. Within CoinLedger, click the “Add Account” button on the top left.
2. Find Coinbase Pro in the list of supported exchanges and select the import method you prefer.
3. You can automatically import your Coinbase Pro transactions using an API connection or import them manually through a CSV file.
4. If you wish to import your trades through API, you can create a read-only API key in the ‘API’ section of your ‘Settings’ within Coinbase Pro.
5. Alternatively, you can download a CSV file from Coinbase Pro in the section labeled ‘Statements’.
And that’s it! Once you’re finished importing your transactions from Coinbase Pro and any other cryptocurrency exchange you are using, you can generate a complete tax report with the click of a button.
Want to get started managing your taxes on Coinbase Pro and other exchanges? Try CoinLedger, the platform used by more than 400,000 crypto investors around the world.