The IRS recently issued proposed regulations requiring brokers to provide reports of digital asset transactions, including cryptocurrency sales, to their customers at year-end.

Per the proposed regulations, beginning with the 2025 tax/calendar year, brokers that provide digital asset transactional services to their customers will be required to track and report gross proceeds from these investments to their customers.  Proceeds from digital asset transactions will be reported on a Form 1099-DA.  For sales that take place after 2025 this new report will be required to include basis and capital gain information to facilitate the reporting of these transactions by taxpayers on their annual personal income tax return.

Because of the lack of a standardized tax reporting requirement for digital assets, the proposed regulations should simplify and clarify necessary tax information from these specialized investments and will facilitate the proper reporting of these investment transactions on personal income tax returns annually.

As these are only proposed regulations and not final, we will continue to track the progress of this new reporting initiative.