If you're a US-based Coinbase user, you may be wondering how to go about filing your taxes. After all, Coinbase is one of the most popular cryptocurrency exchanges in operation today.
The good news is that Coinbase makes it relatively easy to track your gains and losses on their platform. They have a dedicated "Tax Center" section which contains all of the information you need to properly file your taxes.
Coinbase also provides a downloadable CSV file of all of your transactions, which can be imported into most major tax software programs. This makes the tax-filing process much easier than it would be if you were using another exchange.
If you're looking for something more automated, including tax planning and portfolio tracking, you might be interested in connecting your Coinbase accounts with the Ledgible Platform. If you'd like to take advantage of our free current year planning capabilities and minimize your tax burden, the following instructions will walk you through how to connect Ledgible with Coinbase.
How to Connect Ledgible and Coinbase
The rest of this article will walk you through adding your Coinbase Pro exchange account to Ledgible Accounting using an API connection. This integration will automatically sync your Coinbase Pro transactions to your Ledgible account.
Helpful Hints for Coinbase Taxes
- Coinbase and Coinbase Pro are treated as separate accounts. If you have transactions on both, you will need to add each account separately to Ledgible.
- Ledgible will only have view-only access to Coinbase Pro. It does not require transfer or trade permissions to sync your transactions.
- To permit Ledgible view-only access to Coinbase Pro, you will generate a new Passphrase, Secret Key, and API Key from your Coinbase Pro account. You will not provide Ledgible with your Coinbase Pro credentials as the API key permits specific access that can be revoked at any time from your Coinbase Pro account if desired by deleting the API Key from the API menu.
- Basic instructions to connect your Coinbase Pro account to Ledgible are provided during the Add Exchange Data flow in Ledgible. Detailed instructions are also provided below with screenshots (some may show the same process in Ledgible Tax; updated screenshots coming soon).
- Be sure to enter the API Key and API Secret in the correct fields- you do not obtain them in the same order as the fields are listed in Ledgible.
Step-By-Step Instructions for connecting Coinbase
- From your Ledgible Tax account, select the Exchanges tab.
- Select the Add Exchange Data button in the top right.Note: If you have not added any exchanges yet, you can also click the Add Exchange Data button shown under Plug Into Your First Exchange in the center towards the bottom of the screen, as shown in the screenshot below. Both buttons will take you to the next screen. If you have added at least one exchange already, the list of linked exchanges will be shown instead.
- Under Exchange Type, choose the radio button (circle) for Exchange API Connection. Select the Next button.
Note: The Exchange API Connection option for Coinbase Pro does not require your credentials. You will be provided with instructions on obtaining an API key and other unique data to sync to your Coinbase Pro account securely without providing your account credentials.
- From the Select Exchange drop down menu, choose Coinbase Pro.
Note: If you have an account on Coinbase, you will need to add that account separately. Transactions on Coinbase and Coinbase Pro are not synced and are viewed as separate exchange accounts.
- You will see fields for a Passphrase, API Key, and Secret. Select the down arrow to the right of API Instructions to expand the steps to obtain these items.
- In a separate browser tab or window, go to the Coinbase Pro website at https://pro.coinbase.com/. If you are not signed in, select the Sign In option from the top right and access your account using your Coinbase Pro credentials and two factor authentication, if enabled.Select the menu button on the top right and then the API option.
Note: It is recommended that you navigate to the Coinbase Pro website from a browser. The API menu option in the Coinbase Pro app on your mobile device redirects to the Coinbase Pro website.
- Select the New API Key button to the right of the My API Keys heading.
- Select which Portfolio you want to allow Ledgible to read the transactions from. If you have more than one portfolio that you want Ledgible to sync with, you will need to create an API key for each Portfolio.
- Under API key nickname, give the API key a unique name that will help you remember that it is for Ledgible and the selected portfolio.
- Under Permissions, select the box to the left of View to add a check mark next to it. Only select View; do not select Transfer or Trade.
- Copy the contents of the Passphrase field in Coinbase Pro and paste it into the Passphrase field on the Add Exchange Data screen in your open Ledgible browser window or tab.
Note: The Passphrase will not be shown again so be sure to copy it from this screen. If you move to the next screen without saving it you will need to start the process over in Coinbase Pro.
- Go back to your Coinbase Pro browser window or tab and click the Create API Key button at the bottom. The IP Whitelist field should be left blank.
- Optional: Enter your 2-step verification code from your mobile device, if enabled, then select the Add An API Key button.
- Copy the API Secret by selecting the copy icon (one square over another square) to the right of the API Secret text. Enter this in the Secret field in your Ledgible browser tab or window. You may also want to save this in a secure location in case you need it again. It will not be shown again in Coinbase Pro or Ledgible. Select the Done button to proceed.Note: Make sure you paste the API Secret into the Secret field in Ledgible, which is the bottom field. The API Key is the middle field and you will obtain the API Key in the next step.
- In your Coinbase Pro browser window or tab, select the text containing lowercase letters and numbers shown underneath your portfolio name to copy it. The text will briefly flash Copied to clipboard. Paste this into the API Key field in your Ledgible Tax browser window or tab.Note: Make sure you paste the API Key into the correct field in Ledgible. It should go in the middle field, while the API Secret from the previous step should go into the bottom field named Secret.
- You are done with Coinbase Pro for this procedure and can close your Coinbase Pro browser window or tab. Return to your Ledgible browser window or tab and select the Next button.
- Give this exchange connection a name; we recommend you use something to indicate that it is for Coinbase Pro and the selected Portfolio in Coinbase Pro. Select Create to complete the exchange connection setup.
- You will receive confirmation that the exchange connection has been created. Select Close to close the window or View Exchange to open your new Coinbase Pro exchange connection.
- If Ledgible displays an error that your credentials are invalid, please check that you have entered the API Key and Secret in the correct fields. You obtain the API Secret prior to the API Key but it goes in the last text field while the API Key goes in the middle text field.
- More troubleshooting steps coming soon.