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August 25, 2023

IRS issues proposed regulations on broker reporting requirements for digital asset sales and exchanges

The IRS has released proposed regulations (REG-122793-19) that would require brokers, including digital asset trading platforms, digital asset payment processors and certain digital asset hosted wallets, to file information returns on certain sales or exchanges of digital assets. Brokers would also have to provide payee statements to customers on a new Form 1099-DA to inform them of the transactions being reported to the IRS. The regulations would apply to sales or exchanges of digital assets that take place on or after January 1, 2025. In addition, the proposed regulations would require brokers to include gain or loss and basis information for certain sales that take place on or after January 1, 2026. Written comments on the proposed regulations must be submitted by October 30, 2023. A Tax Alert is forthcoming.

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor