r/kraken — public pain points

• Complicated Tax Reporting for Cryptocurrency Transactions

  New IRS regulations are complicating tax reporting for cryptocurrency transactions, requiring users to track cost basis for each wallet separately. This creates significant anxiety and confusion for users, as they must meticulously document every transaction across multiple wallets to avoid penalties. The lack of user-friendly tools to assist with this process exacerbates the problem, leaving many users feeling overwhelmed and at risk of non-compliance.

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• Overpaying Taxes Due to Missing Cost Basis Information

  Users face significant financial risk due to the new 1099-DA form, which does not provide complete cost basis information for their cryptocurrency transactions. This lack of clarity can lead to users being taxed on the full proceeds of their sales, rather than their actual gains, resulting in potential overpayment of taxes. The absence of user-friendly tools to help reconcile these discrepancies exacerbates the problem, leaving users feeling vulnerable and anxious about their tax obligations.

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• Complexity in Tracking Cost Basis for Wallet Transfers

  Users face significant challenges in tracking the cost basis of their cryptocurrency during wallet transfers, leading to potential tax issues. The lack of clear guidance and tools to help users manage their transaction history across multiple wallets creates anxiety and confusion, risking non-compliance with tax regulations. This problem is exacerbated by the complexity of IRS regulations and the absence of user-friendly solutions, leaving users feeling overwhelmed and at risk of financial penalties.

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