Blockchain governance company Node40 has come up with an innovative solution enabling Americans to declare their cryptocurrency assets to the tax authorities.
The tool is called Node40 Balance, and it calculates net gains and losses for every transaction made during a given calendar year. The software then populates the respective IRS form. Node40’s management have dubbed the program “a feature-packed blockchain accounting service that brings the familiarity of services like QuickBooks or TurboTax to the world of digital currency.”
According to CEO of Node40 Perry Woodin, the competitive edge of the tool lies in the precision in computing gains and losses that the system applies. A straightforward FIFO strategy would not be sufficient for cryptocurrency transactions, hence the algorithm that Node40 implements uses the true carrying cost and days held.
The main challenge Node40 tackles has to do with the failure of current software to take minute-by-minute price fluctuations into account. So far the tool has undergone thorough beta testing using real-world use cases.
Due to the advantages of the tool, Mr Woodin expects great demand.