TaxBit releases cost basis tool for digital assets

TaxBit, which makes tax and accounting software for the tokenized economy, debuted a new Cost Basis Interchange solution for reports and compliance on digital assets.

While regulations on traditional equities and securities require the sharing of cost basis and acquisition information when assets are moved between brokers, there has not been such a requirement for cryptocurrency and other digital tokens. However, the Infrastructure Investment and Jobs Act will require digital asset brokers to exchange cost-basis information on a broker-to-broker level and require an entirely new transfer of cost-basis to the IRS in the broker-to-non-broker context (i.e., any off-platform wallet address).

TaxBit's CBI product includes transfer pricing and portability of cost-basis information between brokers and non-brokers to support decentralized and smart contract protocols.

"With the launch of CBI, digital asset brokers now have a forward-looking solution to address not only compliance needs but also one of the industry's largest user experience challenges — missing cost basis," said TaxBit founder and CEO Austin Woodward in a statement. "CBI is one seamless API that makes cost basis interoperable."

TaxBit is partnering with several other companies on the launch. Founding CBI partners include FTX US, Gemini, Paxos, ZeroHash, BlockFi, PrimeTrust, Okcoin, Uphold, Coinme, CoinList, Ledn and other platforms.