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By 
July 01, 2024 at 01:49 PM
What You Need to Know
- The final regs require brokers to report certain transactions in crypto and other digital assets that take place beginning in 2025.
- Reporting is required by brokers who take possession of the digital assets being sold by their customers.
- The IRS will collect much-needed (and rightly owed) tax revenue, says Ric Edelman.
The Treasury Department and the Internal Revenue Service have issued final regulations requiring custodial brokers to report sales and exchanges of digital assets, including cryptocurrency.
The reporting requirements “will help taxpayers to file accurate tax returns with respect to digital asset transactions, which are already subject to tax under current law,” according to IRS and Treasury.
The final regs require brokers to report certain sale and exchange transactions that take place beginning in calendar year 2025 and will be reported on the soon-to-be released Form 1099-DA.
“These regulations are an important part of the larger effort on high-income individual tax compliance,” IRS Commissioner Danny Werfel said in a statement. ”We need to make sure digital assets are not used to hide taxable income, and these final regulations will improve detection of noncompliance in the high-risk space of digital assets.”
IRS research and experience “demonstrate that third-party reporting improves compliance,” Werfel said. ”In addition, these regulations will provide taxpayers with much needed information, which will reduce burden and simplify the process of reporting their digital asset activity.”
The final regulations reflect consideration of more than 44,000 public comments received last fall on the proposed regulations, according to Werfel. Reporting is required by brokers who take possession of the digital assets being sold by their customers.
