PayPal Transfers from Celsius | Cost Basis Confusion Ignites User Backlash
Edited By
Miyuki Tanaka
A rising wave of confusion surrounds PayPal's handling of cost basis for Celsius users. With tax season approaching, many are questioning how the platform calculates and reports profits and losses (P/L) from their crypto assets. This controversy arrives at a time when the IRS’s reporting requirements are evolving.
Users are frustrated as they grapple with inconsistencies in PayPal's cost basis method. Reports indicate that PayPal employs the Highest In/First Out (HIFO) method to calculate the cost basis, a fact noted in the statements intended for tax reporting. However, this method may not suit everyone, especially those dealing with complex situations like capital losses or theft/casualty claims. A quick glance at community sentiments reveals a mix of cautious optimism and frustration, leading to a growing urge to explore alternatives.
Interestingly, as one user pointed out, "I’ve already 'paid' my taxes on Celsiusuntil then the IRS can kiss my ass." This reveals a deeper sentiment among users who now feel disassociated from their previous holdings, questioning the legitimacy of their tax responsibilities. Others are echoing similar thoughts: "Not reporting shit about the Celsius payoutsI haven’t sold a thing. No taxable event in my mind."
Users Seek Clarity Amid Changing Regulations
Confusion pervades the conversation surrounding PayPal’s reporting obligations. Some users are uncertain as to how distributions are reported to the IRS, especially with changing guidelines. For instance, sales in 2024 won’t prompt any reporting from exchanges, while those in 2025 will require only proceeds reporting. By 2026, both proceeds and costs must be reported. Users are left juggling the implications of these shifting regulations.
Community feedback suggests a range of approaches to tax reporting. Many are considering alternative platforms for transactions to avoid hefty PayPal fees and minimize inaccuracies during reporting. One user noted, “I thought about this, and yeah, good idea to empty my PayPal back to CB.” This might be a savvy move considering PayPal's reputation for elevated costs.
Key Takeaways
△ Users voice confusion over PayPal’s cost basis reporting method.
▽ Frustration mounts over tax liabilities amid evolving IRS regulations.
※ „Not reporting shit”—a common refrain among Celsius users.
Despite the backlash, PayPal maintains that the method of calculating P/L is robust enough for tax purposes. However, many users are encouraged to consult tax advisors for tailored guidance, especially when it comes to complex situations involving capital losses or the HIFO method, which may not align with everyone's realities.
While PayPal continues to navigate this storm, users remain on alert, exploring efficient avenues for managing their crypto taxes without incurring any undue penalties. The time is now for clarity and possibly a transition away from platforms that may not meet the unique needs of crypto holders.