The Infrastructure Investment and Jobs Act expanded the tax code’s reporting requirements for brokers when it came to digital assets.
According to a Dec. 23 announcement from the IRS and the Treasury Department, brokers are not required to report any additional information regarding the disposition of digital assets until final regulations under sections 6045 and 6045A of the tax code are issued.
The Infrastructure Investment and Jobs Act, which became law last year, amended sections 6045 and 6045A to clarify and expand the rules for brokers reporting information on digital assets. According to the IRS, brokers are still required to follow existing laws and regulations. More information is available in Announcement 2023-2, which was published on IRS.gov on 22nd December 2022.
The transitional guidance, according to the Treasury Department and the IRS, only applies to information returns submitted or provided by brokers. Taxpayers, however, are still required to report any income they receive from dealings involving digital assets. They must also answer the digital asset question on page one of either. Details can be found in the instructions for these forms.
Brokers can continue to report gross proceeds and basis as required by current law as of December 23, 2022, according to Announcement 2023-2, until new final regulations are issued under Sections 6045 and 80603 of the Infrastructure Investment and Jobs Act. Brokers may also continue to provide statements on covered security transfers as required by current law and regulations as of December 23, 2022, until final rules under Sections 6045A and 80603 are issued.
The IRS stated that until the new final regulations under sections 6045 and 6045A are issued, brokers will not be required to report or provide additional information with respect to dispositions of digital assets under Section 6045, issue additional statements under Section 6045A, or file any returns with the IRS on transfers of digital assets under Section 6045A(d).
The tax laws are very complex. Our short blog articles cannot fully cover all the rules’ nuances. Your specific facts may hold various opportunities and possible risks that only trained, experienced, and highly qualified tax specialists can spot. We encourage you to find such help, rather than trying to figure it out alone. Consider giving this marketplace a try by posting your project and signing up here.
If you are a licensed tax professional interested in helping others either part-time, full-time, or ad hoc, come on in! Happy to have you. Our marketplace has the full suite of tools to communicate with clients including compliance calendars, task and message management, and billing. You can also quickly connect to knowledgeable colleagues who can complement your services with the ones you do not provide. Register here.
