NODE40, the blockchain tech company bringing best-in-class tax compliance to American cryptocurrency users, has launched Litecoin support on its popular Software as a Service (SaaS) offering, NODE40 Balance. The addition means every single Litecoin user across America, can accurately report their gains and losses to the Internal Revenue Service (IRS) without fear of tax evasion, underreporting, or overreporting. The product is expected to be a welcome reprieve for the growing list of Litecoin traders, especially Coinbase users, who until now, have had very limited options for reporting gains and losses to the taxman each fiscal year.
Currently, NODE40 Balance’s Litecoin service is available for all HD wallets with access to the xPubkey. Access to NODE40 Balance is free during its beta period and the paywall has been removed to optimize customer feedback until Q4 2017. The company also recently included bitcoin support in addition to Dash.
Perry Woodin, CEO of NODE40 declared:
“Not only is blockchain accounting inherently complicated, it’s currently under heavy legal scrutiny. Since the IRS considers digital currency property, each and every input to a transaction has a potential gain or loss. Tracking the cost basis and days carried on every input to a transaction is simply not possible without sophisticated software. Nobody wants to think about gains and losses when purchasing goods or services, much less manually record transactions in a spreadsheet for future record keeping. NODE40 Balance allows digital currency owners to use the blockchain as the public ledger it was always intended to be, and provides users with the most accurate data for their reporting obligations at tax time.”
“Even as digital currency matures and more mainstream investors jump aboard, we believe that Litecoin will permanently remain a form of property, as per notice IR-2014-36. What this means is that reporting Litecoin tax liability is an individual legal responsibility under the ‘Sale and Disposition of a Capital Asset,’ and Americans need a long term, reliable, cost effective, and most importantly, IRS-friendly solution. We are proud to finally bring that solution to market.”
The method previously used by Litecoin traders to report their gains and losses was either through a painstakingly slow manual process, or the highly inaccurate First In First Out (FIFO) method which should not be applied to transactions ex post facto.
[perfectpullquote align=”full” cite=”Perry Woodin” link=”” color=”” class=”” size=””]“The problem with FIFO is that it needs to be applied at the time of the transaction. People should really be creating transactions where the inputs are FIFO; it simply doesn’t work to apply FIFO after the fact. While some services are geared towards one-off taxation reporting, NODE40 Balance aims to be a consistently accurate platform that tracks performance and reports on gains, losses, and income throughout the year. All users need to do is upload their transactions, await the calculations, and then send the resulting Form 8949 to the government when they file.”[/perfectpullquote]