Law & Policy

Treasury and IRS issued final rules for broker reporting of digital asset transactions on Form 1099-DA. Key points include updates on DeFi, stablecoins, NFTs, PDAPs, and more. Highlights improvements over proposed rules but notes complexity and potential traps. Read more from @cryptotaxguy.eth

CRYPTO BROKER REPORTING REGS FINALIZED

On Friday, June 28, Treasury and the IRS issued final regs under tax code section 6045 requiring custodial brokers to report dispositions of digital assets to the seller and the IRS on Form 1099-DA.

This post is my first cut at summarizing the key points.

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The default is that, absent specific identification, you sell the crypto that (1) has been longest in your possession AND (2) is in the selling wallet (even if it was transferred to that wallet more recently than other lots).

Thanks! Could you elaborate on the multiple lots issue more? It seems rather confusing and complex. Does it mean I always sell the crypto first that has been longest in my wallet, not that has been longest in my possession? If I recently bought some ETH at Coinbase and then I transfer in ETH from cold storage and sell then I sell the ETH first that I bought most recently? Or am I misunderstanding? And for which tax year does this take effect?