crypto - Linkenheimer LLP CPAs & Advisors

Tax News for Investors and Users of Cryptocurrency

If you’re a crypto investor or user, you may have noticed something new on your tax return this year. And you may soon notice a new form reporting requirements for digital assets.

Check the box

Beginning with tax year 2022, taxpayers must check a box on their tax returns indicating whether they received digital assets as a reward, award or payment for property or services or whether they disposed of any digital assets that were held as capital assets through sales, exchanges or transfers. If the “yes” box is checked, taxpayers must report all income related to the digital asset transactions.

New information form

Under the broker information reporting rules, brokers must report transactions in securities to both the IRS and investors. Transactions are reported on Form 1099-B. Legislation enacted in 2021 extended these reporting rules to cryptocurrency exchanges, custodians and platforms and to digital assets such as cryptocurrency. The new rules were scheduled to be […]

By Linkenheimer LLP|2023-04-25T15:54:16+00:00April 25th, 2023|crypto, investment|0 Comments

New Digital Asset Reporting Requirements Will Be Imposed In Coming Years

The Infrastructure Investment and Jobs Act (IIJA) was signed into law on November 15, 2021. It includes new information reporting requirements that will generally apply to digital asset transactions starting in 2023. Cryptocurrency exchanges will be required to perform intermediary Form 1099 reporting for cryptocurrency transactions.

Existing reporting rules

If you have a stock brokerage account, whenever you sell stock or other securities, you receive a Form 1099-B after the end of the year. Your broker uses the form to report transaction details such as sale proceeds, relevant dates, your tax basis and the character of gains or losses. In addition, if you transfer stock from one broker to another broker, the old broker must furnish a statement with relevant information, such as tax basis, to the new broker.

Digital asset broker reporting

The IIJA expands the definition of brokers who must furnish Forms 1099-B to include businesses that are responsible for regularly providing any service […]

By Linkenheimer LLP|2021-12-03T16:20:08+00:00December 3rd, 2021|crypto, tax implications, tax planning|0 Comments