Cryptocurrency Reporting Delayed
The IRS, still dealing with a tax return backlog, announced it would delay the reporting requirements for digital asset brokers. While this doesn’t change the reporting requirements for taxpayers, it means you should not expect to receive Form 1099-B from cryptocurrency exchanges. The IRS has not announced when it will begin to enforce these requirements.
As a reminder, below are the other cryptocurrency provisions outlined in the 2021 Infrastructure Act that should have been implemented for the 2022 tax year:
Expanded the definition of broker to include Coinbase and other exchanges
Required Know Your Customer (KYC) information
Expanded definition of digital asset to include NFTs
Classified digital assets with value of $10,000 or more as cash
It is unclear if the IRS has delayed the reporting requirement for Form 8300, but it appears it will be deferred along with the rest of the guidance outlined in the Infrastructure Act. Form 8300 requires businesses to report cash payments received in excess of $10,000 and would also apply to digital assets under the new provisions.
Reminder: The IRS will still require you to answer a yes/no question on the first page of your tax return related to digital asset activity. Make sure you address this before finalizing your tax return.