Understanding Final Regulations on Digital Asset Reporting: Sai CPA Services Explains
Understanding Final Regulations on Digital Asset Reporting: Sai CPA Services Explains The U.S. Department of the Treasury and the IRS have issued final regulations mandating custodial brokers to report transactions involving digital assets, including cryptocurrency. These regulations aim to enhance tax compliance and accuracy for digital asset transactions already subject to taxation under current laws. Scope of Reporting Requirements The regulations primarily target custodial brokers, including digital asset trading platforms, certain wallet providers, digital asset kiosks, and processors of digital asset payments (PDAPs). These brokers must report transactions where they take possession of digital assets being sold or exchanged. Additional Provisions In addition to transaction reporting, the regulations provide guidelines for taxpayers to determine their basis, gain, and loss from digital asset transactions. Backup withholding rules are also introduced. Transition...