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US Treasury Finalizes Cryptocurrency Rules to Prevent Tax Evasion
While people who own and sell cryptocurrencies have always had to pay taxes on their earnings, a new rule finalized from the United States Department of the Treasury can ensure they are paying the correct amount on 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 JournalAuthorities hope the measure would discourage tax evasion, since the IRS would know exactly how much a taxpayer owes.
At the same time, the rule will make it much easier for people to report their earnings because their brokers will now have to provide them with a 1099 form. The IRS has released a draft form of 1099-DA (Digital Asset Proceeds From Broker Transaction) made specifically for tracking crypto transactions last year and will make the final version available soon. Of note, the rule sets a threshold of $10,000 for reporting transactions involving stablecoins, which are cryptocurrencies that track fiat money like the US dollar.
“[I]Digital asset investors and the IRS will have better access to the documentation they need to easily file and review tax returns,” said Aviva Aron-Dine, acting assistant secretary of the Treasury for tax policy, in a statement. “By implementing the law’s reporting requirements, these final regulations will help taxpayers more easily pay taxes owed under current law, while reducing tax evasion by wealthy investors.”
The new rule will only apply to platforms that take possession of digital assets, such as Coinbase or Binance. It does not cover decentralized platforms, which will have to comply with a separate rule that is expected to be finalized by the end of the year. Brokers will have to start reporting digital asset sales proceeds in 2026 for all transactions completed in 2025, meaning crypto traders will still be on their own for 2024.
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