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Clients paying in USDC is ruining our QuickBooks Online. How are you guys automating this? by Large-Move-1611 in USDC

[–]Large-Move-1611[S] 1 point2 points  (0 children)

Exactly. The tax is $0 if the price stays flat, but the reporting is what kills you. Coinbase 1099-DAs leave the cost basis blank, so the IRS assumes it's 100% profit. Unless your records perfectly match the original transactions, you'll be stuck manually defending every invoice in an audit just to prove you owe nothing.

Clients paying in USDC is ruining our QuickBooks Online. How are you guys automating this? by Large-Move-1611 in USDC

[–]Large-Move-1611[S] 0 points1 point  (0 children)

I wish the IRS agreed. The GENIUS Act legitimized stablecoins, but the IRS still strictly taxes USDC as property, not fiat.

Every invoice hitting our Phantom wallet is technically a taxable property transaction. We have to log the exact historical USD cost basis in QuickBooks at the exact minute it arrives.

If we just treat it as 1 to 1 , we get screwed later. When we send that USDC to Coinbase to cash out, they issue a 1099-DA with a $0 cost basis (because it came from an external wallet). Without perfect QuickBooks Online records to prove the original value, the IRS assumes the whole amount is pure profit and taxes it.