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Reporting guidelines for cryptocurrency, digital assets change under Infrastructure Bill

[1]Although not slated to take effect until January 2024, cryptocurrency investors and other digital asset holders should be aware of new reporting requirements spelled out in the recently signed $1.2 trillion Infrastructure Investment and Jobs Act:

  • Form 1099-B Reporting Requirements: Cryptocurrency “brokers,” which will mainly be exchanges, will be required to report cryptocurrency gains on a type of 1099 form.  The “broker” or exchange must send a Form 1099-B to both the Internal Revenue Service (IRS) and their customer. The customer will use information from the 1099-B to calculate their preliminary gains and losses, which will then be reported on their own tax return.  The broker’s Form 1099-B will not included private wallet holdings, potentially causing overstatement of gains or losses relative to the investor’s entire crypto portfolio.
  • Section 6050I expansion to include digital assets:  Section 6050I requires that people who receive more than $10,000 in cash and equivalents file a report with the IRS. The report includes details about who paid them, including names and Social Security numbers. Any failure to report details about those sending payments is considered a felony offense.  Now, transactions involving digital assets and cryptocurrency will be required to meet this disclosure standard.

Contact a ShindelRock tax professional [2] to ensure you are prepared for the new crypto and digital assets changes brought by the Infrastructure Bill.