CoinTracking: A Helpful Tool for Cryptocurrency Tracking and Tax Reporting

1. Overview

Crypto bookkeeping presents unique challenges due to the volume, complexity and nature of transactions, not to mention that it is also relatively new to the field and transactions can come from different sources and may have different formats. In this article, we will discuss how traders, crypto accountants and tax professionals can use CoinTracking to help manage the crypto data and assist to make tax reporting accurate.

2. What CoinTracking Does and its Notable Features

CoinTracking is a platform that can be used as a cryptocurrency portfolio tracker and tax reporting tool that helps organize, clean, analyze and consolidate cryptocurrency transactions. Here are its notable features:

1. Centralized view of portfolio: CoinTracking offers one-stop viewing of all your portfolios. This feature is very useful for traders as it shows the complete picture of the crypto investments which can help in performance tracking and decision making.

2. Ease of importing data: You can import your data in CoinTracking through the following methods:

• via API: CoinTracking supports hundreds of major exchanges and wallets, though coverage varies by chain, protocol, and transaction type. With the paid plan, API transfer feature also comes with daily or near-real-time syncing depending on the exchange or wallet.
• via CSV/XLS: As not all the blockchain wallets and exchanges are supported in CoinTracking as of the moment, users have the option to download transaction history files from the unsupported platforms and have them imported via CSV/XLS to CoinTracking
• via Manual Entry: Transactions can be manually entered into CoinTracking

3. Automatic tagging of transactions: Cointracking suggests categories to transactions as they are imported, saving users time and effort, though classifications still require review to ensure accuracy.

4. Bulk editing of transactions: CoinTracking has the bulk editing function which can simultaneously edit and delete transactions such as changing incorrect categorization due to automatic classification, deleting duplicate imports, etc., without going over transactions one by one.

5. Trades Backup: This CoinTracking function is very useful to crypto accountants against accidental data deletion or corruption. The number and frequency of trade backups depend on the paid plan level.

6. Crypto Tax Reports: CoinTracking automatically generates crypto tax reports based on the transaction data and classifications provided, which must be reviewed and validated before filing. This is available only to paid plans.

7. CoinTracking Mobile App: Allows real-time portfolio tracking whenever and wherever you are.

3. How to Review High-Volume Crypto Transactions using CoinTracking

Here’s a quick rundown on how to review high-volume transactions using CoinTracking:

1. Start by Importing all the Transactions from the blockchain wallets and exchanges
2. Identify and Resolve Data Issues such as duplicates, missing cost basis and classifications, unmatched transfers, etc.
3. Use Bulk Editing feature to Fix Multiple Issues
4. Reconcile wallet balances & cost basis: Check the balances in CoinTracking against blockchain explorers and validate calculated gains or losses
5. Manually review high-risk transaction types (DeFi, bridges, NFT trades, internal transfers) before finalizing reports
6. Finalize Tax Reports

4. Conclusion

Using crypto reconciliation tools like CoinTracking simplifies the challenges of crypto bookkeeping and tax reporting by centralizing the data, automating the transaction classifications and bulk editing of transactions, among its features. It can also enable users to be confident as to the reports it generates, even with high-volume and complex data.