The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have released final regulations on reporting requirements for brokers of digital assets, as part of the Biden-Harris Administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA). These regulations align digital asset reporting requirements with those long established for traditional financial services.
Owners of digital assets have always been required to pay taxes on sales or exchanges, a stipulation unchanged by the IIJA. The act introduced reporting requirements akin to those in traditional financial services to aid taxpayers in filing accurate returns and paying owed taxes.
Beginning in 2026, brokers will be mandated to report gross proceeds from digital asset sales occurring in 2025. By 2027, they must also report tax basis information for certain digital assets sold in 2026.
“Because of the bipartisan Infrastructure Investment and Jobs Act, investors in digital assets and the IRS will have better access to the documentation they need to easily file and review tax returns,” said Acting Assistant Secretary for Tax Policy Aviva Aron-Dine. “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.”
Compliant taxpayers previously had to rely on costly third-party services to calculate gains or losses from digital asset transactions. The new regulations ensure that owners receive necessary information directly from brokers, facilitating more accurate, easier, and less expensive tax filings. They also equip the IRS with essential data to address tax evasion risks associated with digital assets.
The development of these regulations followed a public hearing and consideration of over 44,000 comments on proposed rules. While today's rules focus on custodial brokers' reporting obligations, additional rules addressing non-custodial brokers are expected later this year.
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