![]() Other Considerations for Cryptocurrency Customers Note that it’s not yet known whether exchanges/platforms will have to file Form 1099-B itself (modified to include digital assets) or some other, new IRS form. Term the digital assets were held (short-term: held for one year or less or long-term: held for more than one year).Gross proceeds from the sale of digital assets.Customer’s name, address, and phone number.Cryptocurrency Customer IRS Reporting Information Required The cryptocurrency exchanges/platforms will have to gather information from customers, so that they can properly issue Forms 1099-B at the end of each tax year. As a result, any platform on which you can buy and sell cryptocurrency will have to report digital asset transactions to the IRS and to you at the end of each year. The 2021 legislation expanded the definition of “brokers” who must furnish Forms 1099-B to include businesses that are responsible for regularly providing any service accomplishing transfers of digital assets on behalf of another person (for example, cryptocurrency exchanges). ![]() New reporting for digital assets (most cryptocurrencies, and potentially some non-fungible tokens (NFTs) On that form, your broker reports details of transactions, such as sale proceeds, relevant dates, your tax basis for the sale, and the character of gains or losses.įurthermore, under the “broker-to-broker” reporting rules, if securities are transferred from one broker to another broker, then the previous broker must furnish a statement with relevant information, such as tax basis, to the new broker. Under current rules, if you have a stock brokerage account, then whenever you sell stock or other securities, you receive a Form 1099-B at the end of the year. The legislation also extends existing cash reporting rules (for cash payments of $10,000 or more) to cryptocurrency, so that businesses that accept payments of $10,000 or more in cryptocurrency will have to report that to the IRS on Form 8300. The rules will be effective beginning for 2023 tax reporting. The information reporting rules also included digital assets such as cryptocurrency (e.g., Bitcoin, Ether, or Dogecoin). The Infrastructure Investment and Jobs Act of 2021 included provisions to extend these broker information reporting rules to cryptocurrency exchanges, custodians, or platforms such as Coinbase, Gemini, or Binance. These transactions must be reported on Form 1099-B. IRS Expands Information Reporting Requirements for Digital Assetsįor many years, the IRS information reporting rules have required brokers to report to the IRS and taxpayers for various transactions in securities.
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