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New US Crypto Tax Reporting Rules Starting 2025

Crypto | Jul 2, 2024

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US Treasury Finalizes New Crypto Tax Reporting Rules for Exchanges and Payment Processors Starting in 2025

The US Treasury Department has finalized a comprehensive set of new cryptocurrency tax reporting guidelines that will take effect in 2025 (2026 tax filing season). These laws, aimed at increasing transparency and compliance, will have a substantial influence on cryptocurrency brokers, exchanges, and investors.  They are also estimated to generate $28 billion in tax revenue over a decade.

See:  CRA Pursues $54 million in Unpaid Crypto Taxes

Starting in 2025, bitcoin brokers, including exchanges and payment processors, will have to record user transactions to the IRS. A new tax form, Form 1099-DA, will be used to report gross profits, purchase dates, and sales prices. Furthermore, any transactions involving digital assets that exceed $10,000 must be recorded. Regulations for non-custodial brokers and decentralized exchanges have been deferred, with further information due later this year.

Treasury Makes Adjustments Based on Industry Concerns

The crypto industry has expressed concerns about the broad definition of 'brokers' triggering potential privacy issues, as well as the high compliance costs. This included nearly 44,000 comments made to reduce excessive restrictions on the impacted organizations.  As a result of this feedback, the Treasury department altered the definition of broker such that "The final regulations require reporting by brokers who take possession of the digital assets being sold by their customers."

Danny Werfel, IRS Commissioner:

“These regulations are an important part of the larger effort on high-income individual tax compliance. We need to make sure digital assets are not used to hide taxable income, and these final regulations will improve detection of noncompliance in the high-risk space of digital assets. Our research and experience demonstrate that third-party reporting improves compliance. In addition, these regulations will provide taxpayers with much needed information, which will reduce burden and simplify the process of reporting their digital asset activity.”

See:  Canada’s Proposed Mutual Fund Crypto Regulations 2024

Compared to Canada?

In Canada, bitcoin transactions are classified as capital gains or business income, and taxpayers must disclose all crypto transactions on standard tax forms. Unlike the United States, Canada does not require particular tax forms for bitcoin transactions, with a focus on individual taxpayer reporting rather than broker duties.  For more information on Canadian regulations, visit the CRA Crypto Guidelines.


These improvements are intended to streamline the tax reporting process for cryptocurrency users and enable the IRS enforce tax compliance more efficiently. As the industry evolves, expect additional rules to change the landscape of digital asset taxes.

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