Insights into IRS’ Draft of Form 1099-DA and Impact on Cryptocurrencies
The CEO of the Chamber of Digital Commerce, Perianne Boring, has recently shed light on the IRS’ latest draft of Form 1099-DA and its implications for the world of cryptocurrencies. In a post shared on X, Boring highlighted the IRS’ move to collect additional data on unhosted crypto wallets, sparking interest among crypto trading participants.
The IRS recently unveiled a new crypto tax form draft, providing a glimpse into the future of crypto transaction reporting. The Form 1099-DA aims to revolutionize the reporting of crypto transactions, particularly those involving unhosted wallets.
While the official announcement is yet to be made, the IRS is actively seeking feedback to improve the draft further. This proactive approach demonstrates the agency’s commitment to enhancing the tax reporting process for brokers and customers in the digital asset trading landscape.
The inclusion of unhosted wallets under the IRS’ regulatory umbrella will require KYC incorporation for crypto sales and exchanges through brokers. This move signifies the agency’s tightening grip on digital asset trading, with significant implications for the industry.
According to the proposed draft, digital asset brokers nationwide will be required to report digital asset sales or exchanges occurring on or after January 1, 2025. Additionally, under certain circumstances, brokers will need to provide reports on gains or losses, along with basis details for sales post-January 1, 2026.
The introduction of Form 1099-DA and the IRS’ focus on unhosted wallets mark a significant development in the regulation of the crypto industry. Stay tuned for further updates on this evolving story.
