IRS Introduces New Tax Rules for Cryptocurrency Transactions

The IRS has introduced a comprehensive tax framework for cryptocurrency transactions, set to take effect on January 1, 2025. This new regime will impact trading platforms, hosted wallet services, and digital asset kiosks, requiring detailed disclosures about customer asset movements and gains, including stablecoins and high-value NFTs. Major platforms like Coinbase and Kraken are directly targeted, while decentralized exchanges and unhosted wallet providers will receive guidelines later.
Starting in 2026, brokers will need to maintain records of the cost basis of assets. Real estate transactions involving cryptocurrencies will also need to report the fair market value of the assets used. These changes stem from the 2021 infrastructure bill, with the IRS aiming to improve compliance and prevent the misuse of digital assets for concealing taxable income.
Public engagement has been significant, with 44,000 comments submitted. The IRS clarified that miners, online forums, and software developers will not be classified as brokers, reducing the regulatory burden on these entities. Stablecoin transactions under $10,000 annually will be reported in aggregate, and only NFT sales over $600 annually need to be reported.
A new 1099-DA form will be introduced to facilitate systematic tracking of cryptocurrency transactions. The IRS remains open to amending the regulations based on industry feedback and legislative changes.