crypto tax proposal
The U.S. Treasury delivered a new proposal for comment on Friday that could raise the bar for crypto business interests dealing in crypto. They’ll need to deliver tax reporting information to the consumer and the government.
The U.S. Treasury press release reads: “Under current law, taxpayers owe tax on gains and may be entitled to deduct losses on digital assets when sold, but for many taxpayers it is difficult and costly to calculate their gains. These proposed rules require brokers to provide a new Form 1099-DA to help taxpayers determine if they owe taxes, and would help taxpayers avoid having to make complicated calculations or pay digital asset tax preparation services in order to file their tax returns. These regulations align tax reporting on digital assets with tax reporting on other assets, and, as a result, avoid preferential treatment between different types of assets.” Read the release.
The new rules which would take effect for the 2025 tax year will be under a comment period until the end of October. The Biden-Harris Administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA) is used as the catalyst for the new rules as well as the need to address “tax cheats” and, on the other hand, the unique complexity consumers encounter with digital asset tax reporting.
The Wall Street Journal reports, “The long implementation timeline for the new rules means the government is giving up on some revenue in 2023 and 2024 while allowing exchanges time to build the required tax-compliance systems. Officials said they also want input from industry officials and investors; the rules ask for comment on 51 separate items.” Read the WSJ coverage.
crypto tax proposal – reaction
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