#Reporting Crypto Transactions to the IRS#
Hot Topic Overview
Overview
The Internal Revenue Service (IRS) will implement third-party reporting for cryptocurrency transactions on centralized crypto trading platforms (e.g., Coinbase, Gemini) starting in 2025. This means these platforms will report cryptocurrency transaction information from user accounts to the IRS via Form 1099-DA, including transaction dates, amounts, etc. This is intended to increase tax compliance and reduce misreporting and underreporting. However, reporting requirements for non-custodial wallets or peer-to-peer transactions on decentralized platforms will only come into effect in 2027, and will only cover total transaction amounts, not cost basis information. The new rules do not introduce new taxes but aim to optimize the reporting process and remind taxpayers of their tax obligations for cryptocurrency transactions.
Ace Hot Topic Analysis
Analysis
The Internal Revenue Service (IRS) will implement third-party reporting for cryptocurrency transactions on centralized exchanges (e.g., Coinbase, Gemini) starting in 2025. This means these platforms will report users' transaction information to the IRS via Form 1099-DA, which will need to be included in 2025 tax filings. The system aims to increase tax compliance and reduce underreporting and misreporting. Notably, this rule only applies to transactions on custodial accounts. Transactions on non-custodial wallets or decentralized platforms involving peer-to-peer trading will begin reporting in 2027 and will only include the total transaction amount, not cost basis information. While the new regulations do not impose new taxes, they will remind taxpayers of their tax obligations for cryptocurrency transactions and streamline the reporting process.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
The Internal Revenue Service (IRS) will begin requiring third-party reporting of cryptocurrency transactions on centralized crypto trading platforms starting in 2025.
Transaction information will be reported by the platforms to the IRS via Form 1099-DA, and will need to be included on 2025 tax returns.
The new rules are designed to increase tax compliance and reduce misreporting and underreporting.
Form 1099-DA will serve as a reminder to taxpayers of their tax obligations with respect to cryptocurrency transactions and streamline the filing process.