π¨ BREAKING: πΊπΈ The U.S. just dropped the BIGGEST bombshell on #Crypto taxation π³
EVERYONE in the crypto space needs to see this NOW π₯
A thread π§΅
EVERYONE in the crypto space needs to see this NOW π₯
A thread π§΅
1/ What's the Proposal?
π The U.S. Treasury wants #crypto brokers, such as exchanges and payment processors, to report users' digital asset sales and exchanges to the IRS.
π A new tax form, Form 1099-DA, will be introduced to help with this.
π The U.S. Treasury wants #crypto brokers, such as exchanges and payment processors, to report users' digital asset sales and exchanges to the IRS.
π A new tax form, Form 1099-DA, will be introduced to help with this.
2/ Purpose of the Rule?
π Make it easier for #crypto users to calculate taxes.
π Ensure crypto brokers report information just like stock or bond brokers do.
π Make it easier for #crypto users to calculate taxes.
π Ensure crypto brokers report information just like stock or bond brokers do.
4/ Origins of the Requirement:
π Comes from the $1 trillion 2021 Infrastructure Investment and Jobs Act.
π Aims to tighten tax reporting for digital asset brokers.
π The new rules could generate roughly $28 billion over 10 years.
π Comes from the $1 trillion 2021 Infrastructure Investment and Jobs Act.
π Aims to tighten tax reporting for digital asset brokers.
π The new rules could generate roughly $28 billion over 10 years.
5/ When Will This Take Effect?
π Proposed to be in effect by 2025 for the tax filings in 2026.
π Proposed to be in effect by 2025 for the tax filings in 2026.
6/ Reactions from the #Crypto Industry:
π Supportive: Some believe that this will provide clarity and make it easier for crypto users to comply with tax laws.
π Critical: Others argue that the proposal is confusing, especially for decentralized platforms which don't operateβ¦
π Supportive: Some believe that this will provide clarity and make it easier for crypto users to comply with tax laws.
π Critical: Others argue that the proposal is confusing, especially for decentralized platforms which don't operateβ¦
7/ Concerns from the Decentralized Sector:
π The proposal might label many decentralized operations as "brokers", which they argue is problematic.
π There's a debate about what "effectuating" transfers really means, especially for self-hosted wallets.
π The proposal might label many decentralized operations as "brokers", which they argue is problematic.
π There's a debate about what "effectuating" transfers really means, especially for self-hosted wallets.
8/ Potential Entities Affected:
π Wallet providers like Metamask.
π Decentralized exchanges like Uniswap.
π Smart contracts with multi-signature security might need new user identification rules.
π Wallet providers like Metamask.
π Decentralized exchanges like Uniswap.
π Smart contracts with multi-signature security might need new user identification rules.
9/ Lawmaker Input:
π Congressman Patrick McHenry and others believe the proposal needs to be clearer and better tailored to the unique nature of #crypto.
π Congressman Patrick McHenry and others believe the proposal needs to be clearer and better tailored to the unique nature of #crypto.
10/ Bright Side:
π Mining operations, a significant part of the #crypto industry, are generally excluded from the proposed changes.
π Mining operations, a significant part of the #crypto industry, are generally excluded from the proposed changes.
11/ Next Steps:
π The Treasury and IRS are open to feedback until Oct. 30.
π Public hearings are scheduled for Nov. 7-8 to discuss the proposal further.
π The Treasury and IRS are open to feedback until Oct. 30.
π Public hearings are scheduled for Nov. 7-8 to discuss the proposal further.
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