Coinbase is providing a Cost Basis for each of the different wallets for Tax purposes.
However they are considering a SELL if you move your money out of their wallet into a hardware wallet.
Great catch Abs!!! Is this transaction labeled by Coinbase in any specific way?
Everyone should be aware of this wrinkle when (if) they go through the process of downloading their activity and give it to their accountant.
Also they provide a 1099-K for users with more than 20K in transactions. Don’t know how helpful will this be as it won’t capture the transactions accurately.
Prime example of The Accountant Full Employment Act. Everyone receiving a 1099-K this year having errors like those described above MUST reconcile their 1099-K proceeds to what they actually received. Put those schedules away for 1.) when/ if the IRS decides to audit your return or 2.) you receive a notice of deficiency related to that difference.
If it is a large difference caused by a large dollar transfer I STRONGLY SUGGEST that you hire a good accountant this year.