While people who own and sell cryptocurrencies have always had to pay taxes on their profits, a new rule finalized by the U.S. Treasury Department can ensure that they are paying the proper amount for their sales. The new rule will require cryptocurrency platforms, such as exchanges and payment processors, to report their users' transactions to the Internal Revenue Service. According to The Wall Street JournalOfficials hope the measure could deter tax evasion, since the IRS would know exactly how much a taxpayer owes.
At the same time, the rule will make it much easier for people to report their income, as their brokers will now have to provide them with a Form 1099. The IRS published a draft 1099-DA form (Digital Asset Income from Broker Transactions) created especially to track crypto transactions last year and the final version will be available soon. It should be noted that the rule sets a threshold of $10,000 for reporting transactions involving stablecoins, which are cryptocurrencies that track fiat money like the US dollar.
“Digital asset investors and the IRS will have better access to the documentation they need to easily file and review tax returns,” Aviva Aron-Dine, acting assistant secretary for tax policy at the Treasury, said in a statement. “By implementing the law’s reporting requirements, these final regulations will help taxpayers more easily pay taxes owed under current law while reducing tax avoidance by wealthy investors.”
The new rule will only apply to platforms that take possession of digital assets, such as Coinbase or Binance. It does not cover decentralized ones, which will have to comply with a separate standard that is expected to be finalized by the end of this year. Brokers will have to start reporting profits from digital asset sales in 2026 for all transactions made in 2025, meaning cryptocurrency traders will still be on their own in 2024.
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