The US Internal Revenue Service (IRS) has unveiled the early draft of a tax form for reporting income from cryptocurrency transactions. The newly released Form 1099-DA, tagged as “Digital Asset Proceeds from Broker Transactions,” is currently open to comments from relevant stakeholders in anticipation of its final version by the IRS.
IRS Aims To Launch Crypto Tax Form By 2025
In August 2023, the US Treasury Department and the IRS proposed a set of rules that would mandate brokers and crypto exchanges to report specific transactions of digital assets with the aim of ensuring fairness among all financial players.
Generally, these proposed rules were part of the 2021 Infrastructure Investment and Jobs Act targeted at improving transparency from brokers on their client’s crypto transactions. Eight months later, the IRS has now launched the preview of a tax form for this purpose.
Notably, Form 1099-DA recognizes brokers as kiosk operators, digital asset payment processors, hosted wallet providers, and unhosted wallet providers. For context, this covers all centralized exchanges, decentralized exchanges, noncustodial wallets, as well as Bitcoin ATMs.
The form requires traders to provide information such as digital asset address, sale transaction ID, the units of digital asset transacted, and the security status of this digital…
