Crypto tax services have become a vital portion of doing business in the Bitcoin ecosystem. For their efforts, CoinTracker, along with its various partners, has attracted serious interest.
CoinTracker has announced that the company now counts over 100,000 users who use the crypto tax service. In March, the company also partnered with additional industry leaders, including Lolli, Casa, Compound, IDEX, Crypto.com, and ErisX, to continue attracting users to the platform.
In the United States, many in the crypto space are aware of the trials and tribulations of doing business in Bitcoin. The primary obstacle has been clarity on the tax status of various digital assets.
For now, the Internal Revenue Service (IRS), which collects taxes in the U.S., identifies crypto as a commodity. This definition means that for every transaction, users must also calculate a capital gain or loss. It doesn’t matter whether one is buying a cup of coffee or making a $100,000 trade.
Every transaction, no matter the size, must take into account the infamous IRS Notice 2014-21. For active users, monitoring each of these transactions as well as their tax implications, is a daunting task. It may even be a deterrent for new users.
This is in part where companies like LukkaTax, CoinTracker, and many other crypto tax services have staked their business. Beyond making the tax process more straightforward, many of these companies have bridged beneficial partnerships with other members of the ecosystem.
For Lolli, a highly-popular crypto rewards project, partnering with CoinTracker also brings peace of mind to users actively earning BTC when shopping online.
“Many of our users were coming to us and asking questions about Bitcoin’s tax status, if it was a stock or a commodity. They wanted us to take a stance on the subject. So by partnering with CoinTracker, we can offer a full-stack approach. We make it easy to own and earn Bitcoin, and now we make it easy to track your portfolio.”
Though earning Bitcoin isn’t a taxable event, as soon as users convert their earnings into fiat, they must also report this conversion. Thus, the partnership with CoinTracker lets users track these events automatically. Lolli users also enjoy a 10% discount on premium tax plans at CoinTracker.
For the co-founder of CoinTracker, Chandan Lodha, partnering with Lolli and others, has followed a clear thesis. “We’re big fans of projects that lower the barrier to cryptocurrency adoption. Lolli, in particular, has made it simple to earn Bitcoin,” Lodha told Crypto Briefing.
Other partners include Coinbase, TurboTax, Casa, Compound, IDEX, Crypto.com, and ErisX.
Lodha added that such collaborations help “increase faith and legitimacy of the cryptocurrency industry as a whole.”
These beneficial partnerships with popular crypto projects have been vital to CoinTracker’s success.
As of March 2020, the company now counts more than 100,000 users since launching two years ago. They have also saved CoinTracker users an estimated $600 million in capital losses on their crypto taxes.