It shouldn't be difficult, unless you don't have access to the proper information. The bitcoins you are selling need to be tied to specific bitcoins that were bought. Once you do that, then you have a cost basis for your sale. Subtract the amount you sold them for from your cost basis and that's your gains. If the source transaction was older than a year, it's capital gains. Otherwise, it's income.

(This is for the US.)

Is there a "first bought, first sold" clause in US tax law regarding securities, or is it the average purchase value of your total holdings during a sale that counts?

E.g. I buy 10 BTC for $1 and then buy 10 BTC for $50 and then sell 10 BTC for $100: I have to pay tax on ($100-$1)

> Is there a "first bought, first sold" clause in US tax law regarding securities, or is it the average purchase value of your total holdings during a sale that counts?

Neither. It's all specific lots (individual orders). How Coinbase chooses which bitcoin to sell will affect what tax you owe.

With a typical brokerage (e.g. Vanguard), you can configure individual securities to sell FIFO, lowest cost, avgcost, or specific lots. Not sure if Coinbase lets you do that.

Edit: From your example:

> E.g. I buy 10 BTC for $1 and then buy 10 BTC for $50 and then sell 10 BTC for $100:

You could sell the last 10 BTC you bought, in which case you'd owe capital gains tax on the $50 appreciation, or you could sell the first 10 BTC you bought, in which case you'd owe capital gains tax on 9 * $5 + 1 * $9 (= $54, slightly more).

How is anyone supposed to distinguish the first 10 BTC from the last 10 BTC when the underlying satoshis might not even be the same? e.g. I might transfer those 10 BTC to an online store (web wallet, other trading, whatever) but then transfer them back, except I'll likely get a different 10 BTC. Seems like all you can determine is that you once bought $x and once sold $y. Since you can also exchange btc for goods, or mine it (which I believe even the IRS has different rules for), you can't say with certainty whether it must be $y <= $x or $y >= $x. So when you sell 5 BTC, it's either mining income (or other income) or a capital gain, but it seems like there's nothing stopping someone from always taking the least expensive taxes first.

> Seems like all you can determine is that you once bought $x and once sold $y.

That's all that matters. Your gains (or losses) are $y - $x.

> it seems like there's nothing stopping someone from always taking the least expensive taxes first.

Yes. If you had some with gains and some with losses, you could even choose to sell those at a loss in order to offset other gains.

You can decide how you want to do cost basis, but once you've decided for one security, you have to continue using that until it's gone. You can do first in, first out, last in, first out, or average price. I believe the default is average.

Under their tools menu, they have a report that calculates it for you.

For the past two tax seasons I've used app.libratax.com to automatically calculate the amount I owe to the IRS. It also exports a list of the relevant transactions to itemize when you file.

It's made filing really easy, well worth the small fee.