(DailyDig.com) – Cryptocurrency brokers will be required to report information to the Internal Revenue Service (IRS) beginning in 2025, according to a new IRS rule that the US Department of the Treasury announced on June 28.
The rule does not alter the tax obligations of taxpayers, as it solely impacts brokers who report on crypto transactions. Non-broker taxpayers that are involved in transactions of digital assets will continue to owe tax on sales or exchanges of those assets. Before this new rule, they had to hire a service to calculate their gains and losses to determine their taxes owed. Brokers will be required to provide this information to the taxpayers involved in these transactions, according to the Treasury.
According to the Treasury’s announcement, cryptocurrency brokers will be required to report beginning in 2026 on their gross proceeds for the sale of 2025 digital assets. Brokers will also be required to report the tax basis information for specific digital assets in 2027, based on sales made in 2026. They use the beginning purchase price of any digital asset, known as the tax basis, to determine the tax due after the asset’s sale.
The secretary for Tax Policy, Aviva Aron-Dine, stated in the press release that these new requirements will help taxpayers understand and pay the taxes they owe and will also reduce the number of wealthy investors trying to avoid paying their taxes.
Cboe Global Markets, an organization, has raised a question about the new rule’s definition of the term broker. Their comment stated that the definition seemed too broad, as it currently defines the term broker as consisting of trading platforms for digital assets along with payment processors and wallet provider hosts. Cboe claimed that it covers agents or organizations that may not be able to provide the required data needed to report regarding taxes.
The US Chamber of Commerce also questioned the rule’s required start date of January 1, 2025, as being too soon to give brokers enough time to develop, test, and implement the new rules.
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