Hi,
coinbase wallet app (not the trading platform, but the separate wallet app) recently introduced a new function that allows conversion between erc-20 tokens such as usdc, dai, etc..
my question is 1) does this actually get reported to irs like the trading platform does when you make a trade. I assume no since the wallet is anonymous, they cant really report it. 2) is this considered a tax event by irs? if i convert say from usdc to dai, it's just a 1:1 conversion, do i have to report it to irs
100%. Don't think that just because it's a 1:1 swap that it's not a capital gains event.
Any time you dispose your coins for another altcoin and/or fiat, you are liable for CGT. You don't even need to withdraw the coins that you transact into for this to count as taxable - the trade itself triggers it.
Whether or not Coinbase reports it is another story altogether. I suspect that they're not that fond of compliance, but you never know. They have your KYC/AML stuff for a reason.