The U.S. Treasury Department and IRS unveiled new cryptocurrency tax reporting requirements set to take effect in 2025, though rules targeting decentralized finance (DeFi) and non-custodial wallets have been postponed.
Key Provisions of the 2025 Crypto Tax Framework
- Broker Reporting Mandate: Digital asset brokers—including exchanges, hosted wallet services, and crypto kiosks—must report customer transactions and gains starting 2026.
- Cost Basis Tracking: Brokers are required to track and disclose clients’ token acquisition costs beginning with 2025 transactions.
- Asset Coverage: Rules apply to most cryptocurrencies with limited exceptions:
- Stablecoins: Only reportable in “very limited circumstances” (e.g., Tether/USDT, USD Coin/USDC)
- NFTs: Reporting threshold set at $600 in annual gains
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Deferred Regulations
The Treasury explicitly excluded two areas from immediate implementation:
1. Non-Custodial Wallet Transactions
2. Decentralized Finance (DeFi) Platforms
This delay follows industry feedback about operational challenges in tracking peer-to-peer and self-custodied transactions.
Practical Implications for Crypto Users
- Taxpayers: No change to existing obligations—all crypto gains remain taxable regardless of broker reporting
- Investors: Expect more detailed 1099 forms from exchanges beginning 2026
- Stablecoin Users: Routine stablecoin sales won’t trigger reporting requirements
Frequently Asked Questions
Q: When do these rules take effect?
A: The broker reporting requirements apply to transactions occurring January 1, 2025 onward, with the first reports due in 2026.
Q: Do I need to report NFT sales?
A: Only if your annual NFT profits exceed $600. Smaller amounts don’t require disclosure.
Q: What happens if I use non-custodial wallets?
A: Currently no reporting requirements, but maintain records as these transactions remain taxable.
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Industry Response
Crypto advocates have praised the phased approach:
– “This sensible timeline allows developers to build compliant infrastructure,” said a Coin Center representative
– Exchange operators note the 2026 implementation gives adequate preparation time
The Treasury emphasized this is Phase 1 of digital asset tax policy, with future rulemakings expected to address:
– Mining and staking income
– Hard fork reporting
– Cross-border transactions
Compliance Preparation Checklist
| Entity | Action Items | Deadline |
|---|---|---|
| Exchanges | Implement cost-basis tracking systems | Jan 2025 |
| Wallet Providers | Develop transaction reporting APIs | Q3 2024 |
| Tax Professionals | Update crypto tax guidance | Ongoing |
| Investors | Review historical transaction records | Before 2026 |
This regulatory clarity comes as global standards for crypto taxation continue evolving, with the OECD’s Crypto-Asset Reporting Framework (CARF) set to take effect in 2027.