Although people who own and sell cryptocurrency will always have to pay taxes on their earnings, the new rule concluded with US Department of the Treasury they can be sure that they are paying the right amount in their sales. The new rule will require cryptocurrency platforms such as exchanges and payment processors to report their users’ transactions to the Internal Revenue Service. according to The Wall Street Journalofficials hope the measure can prevent tax evasion because the IRS knows exactly how much a taxpayer owes.
At the same time, the rule will make it much easier for people to declare their earnings because their brokers will now have to provide them with a 1099 form. The IRS released a draft Form 1099-DA (Digital Asset Proceeds From Broker Transaction) was developed especially to track cryptocurrency transactions last year and will soon release the latest version. Note that the rule sets a $10,000 threshold for reporting transactions related to stablecoins, which are cryptocurrencies that track fiat money such as the U.S. dollar.
“[I]Investors in digital assets and the IRS will have better access to the documents they need to easily file and review their tax returns,” he said. will help to pay more easily.
The new rule will only apply to platforms that own digital assets, such as Coinbase or Binance. This does not include decentralized ones, which must comply with a separate rule expected to be finalized later this year. Brokers will have to start reporting digital asset sales revenue for all transactions in 2025 in 2026, which means cryptocurrency traders will still be on their own in 2024.
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