US Treasury and IRS finalize crypto tax reporting rules for brokers
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The US Department of Treasury and the Internal Revenue Service (IRS) announced the final tax reporting requirements for crypto brokers on June 28. The rules apply to digital assets’ sales or exchanges handled by crypto services. The US Treasury mentioned these tax implementations as part of the bipartisan Infrastructure Investments and Jobs Act. The Treasury and the IRS mentioned that the regulations only required reporting. The IRS assured that it did not impose new taxes on crypto businesses. Crypto brokers will now file Form 1099, similar to traditional investment firms. However, tax reporting for crypto brokers will be in a new version, Form 1099-DA, which is still being drafted. Also read: Ethereum ETF and Solana ETF Could Crush ETH and SOL’s Price, Investors Look Into RCOF The released final regulations will apply to trading, digital asset kiosks, and hosted wallet services. The IRS delayed the rules for decentralized finance (DeFi) services, including decentralized exchanges and unhosted crypto wallets. The Treasury and IRS admitted that issues specific to non-custodial institutions needed more consideration. The IRS mentioned that crypto brokers needed to start filing for their gross proceeds from 2026 for all sales or exchanges starting in 2025. Brokers also needed to report the cost basis of some of their customers’ assets starting in 2027 for 2026’s sales. New regulations will also reach real estate companies that receive payment for their goods and services in digital assets. All services will get this one year to adjust to the changes. IRS provides clarity for crypto investors’ tax obligations The IRS developed these final rules based on the public comments received on previous crypto tax regulations’ proposals. The Treasury Department reviewed over 44,000 comments for the process. In these comments, the main concern remained clarity around institutions within DeFi, such as privacy issues and…
Filed under: News - @ June 29, 2024 7:12 pm