- Under these regulations, entities solely providing validation services or hardware/software for managing private keys will not face new reporting requirements.
- Stablecoin sales will generally not require individual reporting unless they exceed a $10,000 threshold, while NFT transactions must be reported if annual proceeds exceed $600.
The US Treasury Department’s IRS has announced new tax regulations that will impact crypto brokers starting in 2025, Coindesk reported. While the rules bring clarity to traditional crypto trading platforms, decentralized finance (DeFi) and non-hosted wallets will see their regulations introduced later this year.
The IRS will require crypto brokers to file 1099 forms, similar to traditional investment firms, beginning with transactions in 2025. This new requirement will apply to trading platforms, hosted wallet services, and digital assets platforms. The IRS aims to increase transparency and tax compliance by having brokers report their customers’ transaction details, including gains and the cost basis of tokens starting in 2026.
The guidelines state that stablecoin sales will generally not require individual reporting unless they exceed a $10,000 threshold. NFT transactions will need to be reported if the annual proceeds exceed $600.
See Related: Are You Skipping Taxes As A Crypto Holder? What You Should Know
Stablecoins, DeFi, and NFTs
The IRS has postponed specific regulations for DeFi operations and non-hosted wallet providers. The agency is still reviewing 44,000 public comments and plans to issue rules for these entities later in the year. The IRS emphasized the importance of these sectors but acknowledged the need for further consideration to develop appropriate regulations.
However, the IRS has assured that it will not impose reporting requirements on entities that solely provide validation services or hardware/software that manages private keys. The agency estimates that about 15 million people and 5,000 firms will be affected by these new rules.
Starting in 2026, real estate transactions paid with cryptocurrencies will also need to be reported. The IRS expects these regulations to reduce tax evasion and provide necessary information for accurate tax filing. Despite the delays for certain sectors, the new rules mark a significant step towards comprehensive crypto tax compliance.
The IRS noted that any future legislative changes regarding stablecoin issuers could lead to revisions of these tax rules. The agency is also closely monitoring the handling of NFTs to ensure that tax enforcement remains effective. The IRS’s final stance on whether tokens are securities or commodities remains neutral, leaving that debate to ongoing legal battles.
