The US Treasury and IRS released finalized guidance for custodial digital asset brokers. Learn how to start planning now for the upcoming reporting deadlines.
What is considered a digital asset?Digital assets include any digital representation of value that is recorded on a cryptographically secure distributed ledger, even if not every transaction is individually recorded.
Who is considered a broker?Digital asset brokers include any person who provides custodial services, facilitating the sale or exchange of digital assets, including centralized exchanges, certain hosted wallet providers, processors of digital asset payments, digital asset kiosks, certain real estate enterprises, and issuers of digital assets that offer to redeem those assets.
What is required?Digital asset brokers will be required to issue annual broker information returns with 1099s, collect TINs with W8/W9s, and Track and report cost basis information for disposed of assets down to the unit level, including selection of accounting method.
What is the deadline?Custodial brokers need to be ready to know who their customers are and track their trades by January 1, 2025.
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