While people who own and sell cryptocurrency have always had to pay taxes on their income, a new rule finalized by the U.S. Treasury Department could help ensure they pay the right amount on their sales. The new rule will require cryptocurrency platforms like exchanges and payment processors to report their users’ transactions to the Internal Revenue Service. According to The Wall Street JournalAuthorities hope the measure will help curb tax evasion, as the IRS will 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 1099 form. The IRS released a draft 1099-DA (Digital Asset Proceeds From Broker Transaction) form last year specifically designed to track crypto transactions and will make the final version available soon. Note that the rule sets a $10,000 threshold for reporting on transactions involving stablecoins, which are cryptocurrencies that track fiat currencies like the US dollar.
“(I)nvestors in digital assets and the IRS will have better access to the documentation they need to easily file and audit tax returns,” said Aviva Aron-Dine, the Treasury Department’s acting assistant secretary for tax policy , in a statement. “By implementing the law’s reporting requirements, these final regulations will help taxpayers more easily pay taxes due under current law while reducing tax evasion by wealthy investors.”
The new rule only applies to platforms that take possession of digital assets, such as Coinbase or Binance. It does not apply to decentralized platforms, which must adhere to a separate rule expected to be finalized later this year. Brokers must start reporting digital asset sales proceeds in 2026 for all transactions completed by 2025, meaning crypto traders will still have to go it alone in 2024.
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