IRS, Treasury Lay Out Transitional Guidance for Broker Reporting on Digital Assets

Brokers are not required to report additional information with respect to dispositions of digital assets until final regulations are issued under sections 6045 and 6045A of the tax code, the IRS and the Treasury Department announced on Dec. 23.

The Infrastructure Investment and Jobs Act, which went into law last year, amended provisions in sections 6045 and 6045A to clarify and expand the rules for reporting of information on digital assets by brokers. However, brokers are still required to comply with existing laws and regulations, according to the IRS. Further details can be found in Announcement 2023-2, posted Friday on IRS.gov.

The transitional guidance only applies to information returns filed or furnished by brokers, the Treasury Department and the IRS noted. In contrast, taxpayers still have to report any income they receive from transactions involving digital assets. They are also required to answer the digital asset question on page 1 of either. See the instructions to these forms for details.

Announcement 2023-2 states that until new final regulations are issued under Section 6045 and Section 80603 of the Infrastructure Investment and Jobs Act, brokers can continue to report gross proceeds and basis as required under existing law as of Dec. 23, 2022. Also, brokers can continue to furnish statements on transfers of covered securities as required under existing law and regulations as of Dec. 23, 2022, until final regulations are issued under Section 6045A and Section 80603.

Brokers will not be required to report or furnish additional information with respect to dispositions of digital assets under Section 6045, or issue additional statements under Section 6045A, or file any returns with the IRS on transfers of digital assets under Section 6045A(d) until those new final regulations under sections 6045 and 6045A are issued, the IRS said.