Treasury Releases Proposed Cryptocurrency Regulations for Brokers
On August 29, 2023, the Department of the Treasury and the Internal Revenue Service (IRS) published proposed rules that would require brokers to report information on sales and exchanges of cryptocurrency and other digital assets. The proposed rules would require digital asset brokers, including trading platforms, payment processors, and certain hosted wallet providers, to report gross proceeds for all sales or exchanges of digital assets starting on January 1, 2025. In certain circumstances, brokers would also be required to provide gain or loss and basis information for sales that take place on or after January 1, 2026. Brokers would be required to file information returns with the IRS using the new Form 1099-DA and to provide payee statements to customers.
Written comments are due by October 30, 2023. A public hearing is scheduled for November 7, 2023. A second public hearing will be held on November 8, 2023, if necessary.