IRS Releases Draft Form for Reporting Digital Currencies Sales

The IRS has released an initial version of a tax form for intermediaries and exchanges to report specific sales of digital assets.

The draft Form 1099-DA, which was released Thursday, describes several types of intermediaries, such as kiosk operators, digital asset payment processors, hosted and non-hosted wallet providers, and others. 

The form also requires information about a “digital asset address” and whether the asset is a “noncovered security.”

These proposed forms are the result of regulations introduced last year that would treat crypto intermediaries similarly to intermediaries that manage more traditional investments, such as stocks and bonds. 

Currently, taxpayers are responsible for reporting and paying taxes on gains and losses from digital assets, but the IRS has acknowledged difficulties in accurately calculating these amounts.