USDC Cost Basis Issue

I have a USDC question (and this just may be a misunderstanding of how the system works on my part), but I did several USD - USDC transfers within CoinbasePro last year in order to quickly lend out USDC on compound.

In several of my transactions the cost basis for the USDC, once I converted it back to USD, is not a 1 to 1 ratio. In fact, most of the time it records the trade as a loss (which, if we’re being honest, is great for taxes! But also, if we’re being honorable, is probably not the right way to handle it). See a screenshot below for an example of what I am talking about. This one is not very much, but since I have a lot of these trades it does add up over time and I believe it is making my tax burden a negative number (which again, is awesome if true, but I really don’t think it is).

To summarize: USDC is showing a cost basis which is causing a “loss” on the trade. My understanding is that all USD - USDC exchanges on CBP are 1 to 1 and would not incur any fees or cost basis differentials.

Thanks!

Hi @stew1922,

You’re right. The reason this happens is that we are using a weighted average of pricing of cryptocurrencies across exchanges and USDC is not 100% tied to $1.00 across the ecosystem. We are in the process of migrating to per exchange pricing which will eliminate the losses you are seeing in this case. If you need a short term workaround, you can also edit the basis/proceeds of transactions to make them match the USD side of the transactions.

EDIT: I just tried your above suggestion, but since these are counted as trades (not send/receive) I cannot edit the cost basis.

Ok, that makes a lot of sense, thanks for the reply!

The individual exchange pricing will help a ton. Do you know when y’all will have it implemented (i.e.- before July 15)?

If it won’t be implemented before July 15, is there a way to filter by cryptocurrency or something else for me to easily navigate to the trade I need to adjust? While I only have about 20 of these trades, I have close to 1,000 transactions total and filtering down to these is difficult.

Thanks again!

Hi @stew1922,

You should be able to edit the basis of the transactions when you receive the USDC. If you aren’t able to have this figured out, please messaged us at feedback [at] cointracker.io.

We don’t have an exact ETA on the USDC:USD 1:1 locking functionality so please plan around it coming after July 15. In the meantime you can search for any coin such as USDC on the transactions page.

Got it. Thanks for the info!

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