Tax season…yes, it can be a real headache. While updating your cost basis on Coinbase isn't mandatory, it can be helpful when you're filing your taxes. Read on below 👇
1. Do I need to update my cost basis on Coinbase?
• No. Coinbase is not required to report its cost basis to the IRS this year. Reporting the cost basis of cryptocurrencies purchased or acquired on Coinbase will only begin next year. Therefore, neither we nor the IRS require you to fill in this information on Coinbase.
• However, as a taxpayer, you need to accurately report your cost basis when calculating your profit and loss when filing your taxes. If you don't report your cost basis on your tax return, the IRS may treat it as $0, which could lead to an overestimation of your income and thus increase your tax liability.
• We offer an option that allows you to add missing cost basis information for assets purchased outside of the Coinbase platform to your record so you can upload it to your tax software or any other tool you or your tax advisor will use to prepare your tax return. Note: This cost basis update does not need to be performed on the Coinbase platform.
• If you choose to update the missing cost basis for your 2025 transactions:
◦ On the Coinbase Tax page, you can update the missing cost basis and regenerate your profit and loss report to help with your tax filing.
◦ You can also work directly with your tax advisor or use third-party tools.
2. Why is my stablecoin cost basis missing?
• Why isn't the cost basis for stablecoins automatically $1 per unit?
While USDC is designed to maintain a 1:1 peg to the US dollar, the IRS classifies all stablecoins as taxable property, not cash. Therefore, as with all cryptocurrencies, if you haven't purchased USDC on Coinbase, we won't track its price base at $1/USDC for you. Transfers of digital assets such as stablecoins do not include access information such as the cost basis and will therefore be considered missing. Learn more:
• Why can't Coinbase assume the cost basis of stablecoins is $1 on behalf of users?
Under the new 1099-DA form, Coinbase cannot assume that the cost basis of assets transferred from other exchanges and wallets is $1. Given that these transactions are unverified, we lack the legal authority to verify users' transaction history.
• What have we done for our users?
◦ Coinbase will continue to advocate for reasonable stablecoin reporting rules.
