When a customer disposes of a digital asset unit specifically to pay a transaction fee, what is the mandatory lot selection rule that a broker must apply for determining cost basis?

If a customer sells digital assets to generate cash for a transaction fee, this constitutes a separate taxable sale. Unless the customer identifies a specific lot, brokers must apply the default First-In, First-Out (FIFO) method to determine which asset units were sold and their cost basis.

Digital Asset Broker Reporting: Complete IRS Form 1099-DA Guide

Q: What is the key regulatory distinction between a digital asset custodian and a broker subject to reporting under the new IRS rules?

The key distinction lies in whether an entity 'effects a sale' of digital assets. Under section 6045, reporting applies only to entities that facilitate or execute the final sale transaction. Custodians that merely hold digital assets and transfer them to an exchange at a customer's direction, without executing the sale, are not brokers and have no reporting obligation. However, platforms that combine custody with trade execution or directly facilitate sales are considered brokers with full reporting responsibilities. The determining factor is operational control over the sale mechanism.

Q: How do the final rules apply the 'effects a sale' standard to non-custodial digital asset kiosks and software developers?

Non-custodial digital asset kiosks and ATMs that facilitate exchanges between digital assets and cash are classified as brokers under the new IRS framework, as they effect sales even without custody. In contrast, developers of non-custodial wallet software or decentralized protocols that merely provide tools, without executing or facilitating sales, are not considered brokers. The key differentiator is whether the entity actively facilitates specific transactions versus providing general-purpose tools.

Q: When do the new digital asset broker reporting requirements officially take effect, and what specific IRS form must brokers use for this reporting?

The reporting rules take effect for transactions settling on or after January 1, 2025. Brokers will file reports for 2025 transactions in early 2026. The required form is Form 1099-DA, 'Digital Asset Sales and Exchanges,' which includes specialized fields for transaction types, cost basis, and covered versus noncovered securities.

Q: For digital assets transferred-in from another platform, what is the crucial difference between a broker's use of customer-provided information for lot ordering versus for reporting cost basis on Form 1099-DA?

Brokers may use customer-provided acquisition data for lot ordering—determining which specific units were sold—but cannot use that same data to report cost basis on Form 1099-DA. For transferred-in assets where the broker lacks direct acquisition knowledge, basis reporting must be left blank or marked unknown, even if customer data is available. This ensures basis reporting reflects only verified acquisition information.

Q: Under what specific circumstances must a broker mark Box 8 on Form 1099-DA, and what is the rationale behind checking this box even if the customer information didn't change the outcome of the lot selection?

Box 8 must be checked whenever customer-provided acquisition data was used in lot selection, even if it didn't alter the result. This disclosure signals that the broker relied on external information, allowing the IRS to recognize when basis or holding-period details were sourced from customers rather than broker records, enhancing transparency and compliance protection for brokers.

Q: If a single transaction involves multiple lots of transferred-in assets with different acquisition dates, how does a broker complete Form 1099-DA regarding the 'transfer-in date'?

When multiple lots with different transfer-in dates are sold in a single transaction, the broker should issue one consolidated Form 1099-DA and leave Box 12b (transfer-in date) blank. Reporting a single date would be inaccurate. Brokers should retain internal records of all transfer-in dates for compliance purposes.

Q: When a customer sells a mix of 'covered' and 'noncovered' digital assets in a single transaction, why is a broker advised to file multiple Forms 1099-DA instead of a single aggregated form?

Covered assets (acquired on or after January 1, 2025) are subject to mandatory basis reporting, while noncovered assets (acquired before 2025) are not. Combining both on one form prevents accurate use of Box 9, which designates noncovered assets and grants penalty protection. Brokers should file separate forms for each type to preserve compliance distinctions.

Q: What specific penalty relief is preserved by separating the reporting of noncovered securities and checking Box 9 on Form 1099-DA?

By separately reporting noncovered securities and checking Box 9, brokers qualify for penalty relief under IRC sections 6721 and 6722 for errors in voluntary basis reporting. This protects brokers from penalties if noncovered basis information proves incorrect, provided the proper designation is made on Form 1099-DA.

Q: What are the unique reporting requirements for a broker using the optional aggregate method when a customer sells a specified NFT they minted versus one they purchased?

When a customer sells an NFT they minted, proceeds must be reported in Box 11c ('Proceeds from creation of digital asset') with Box 1f left blank. For NFTs the customer purchased, proceeds are reported in Box 1f as standard sales. If both occur, separate Forms 1099-DA must be filed to differentiate creator income from resale activity.

Q: How is the 3% fluctuation rule applied over the consecutive 10-day period for a digital asset to qualify as a stablecoin for optional reporting?

A digital asset qualifies as a stablecoin if its value does not fluctuate by more than 3% from its pegged currency over any consecutive 10-day period. The IRS evaluates rolling 10-day windows throughout the year. Temporary deviations exceeding 3% do not disqualify the asset if the sustained 10-day fluctuation remains within the 3% threshold.

The IRS's new Form 1099-DA requirement forces crypto brokers to report every digital asset sale starting in 2025, ending the era of unreported cryptocurrency transactions and dramatically increasing audit risk for traders.

The introduction of mandatory digital asset broker reporting represents a significant shift in cryptocurrency tax compliance.

In our guide, we'll walk you through the relatively complex IRS requirements that take effect for transactions beginning January 1, 2025, providing clarity on who must report, what information is required, and how to navigate the intricate rules surrounding cost basis, lot ordering, and specialized asset classes.

Defining the Digital Asset Broker and Scope of Reporting

Understanding the regulatory scope of these new requirements is fundamental to compliance. The distinction between entities that must report and those that don't hinges on precise definitions of what constitutes "effecting a sale" rather than merely facilitating asset custody or transfer.

The Core Requirements for Digital Asset Broker Reporting: Who Must File and When?

Q1: What is the key regulatory distinction between a digital asset custodian and a broker subject to reporting under the new IRS rules?

The critical dividing line centers on whether an entity "effects a sale" of digital assets. Under section 6045, digital asset broker reporting obligations are triggered only when a business actively facilitates or executes the final sale transaction itself.

A custodial service that simply holds digital assets and transfers them to a separate exchange platform at the customer's direction - without actually executing the sale - does not meet the "effects a sale" threshold. These pure custody providers have no reporting obligation because they never complete the taxable event. The customer's subsequent sale on the exchange platform would trigger reporting requirements for that exchange, not the custodian.

Conversely, platforms that combine custody with trade execution, or that directly facilitate sales by matching buyers and sellers and settling transactions, are classified as brokers with full digital asset broker reporting responsibilities. The determining factor is operational control over the sale mechanism, not merely holding assets on behalf of customers.

Q2: How do the final rules apply the "effects a sale" standard to non-custodial digital asset kiosks and software developers?

The IRS has taken a definitive stance on physical infrastructure that facilitates digital asset transactions. Non-custodial digital asset kiosks and ATMs that enable customers to exchange digital assets for cash or other assets are explicitly classified as brokers under the new framework, regardless of their non-custodial nature.

This classification reflects the economic reality that these kiosks serve as intermediaries that effect exchanges and sales, even if they don't maintain ongoing custody relationships. When a customer uses a kiosk to sell Bitcoin for dollars, the kiosk operator is facilitating and completing that sale transaction, bringing them squarely within the digital asset broker reporting requirements.

However, the rules draw a distinction for pure software developers who create non-custodial wallet software or decentralized protocols. Developers who merely provide tools that enable peer-to-peer transactions without themselves effecting sales or maintaining any operational role in executing trades generally fall outside the broker definition. The key differentiator is whether the entity maintains an active role in facilitating specific transactions versus providing general-purpose software that users control independently.

Q3: When do the new digital asset broker reporting requirements officially take effect, and what specific IRS form must brokers use for this reporting?

The compliance timeline begins with transactions occurring on or after January 1, 2025. This means any sale or exchange of digital assets that settles on that date or later triggers potential reporting obligations for qualifying brokers. The effective date applies to the transaction date, not when the form is filed—brokers will file reports for 2025 transactions in early 2026, following the standard tax reporting calendar.

The IRS has created a dedicated form for this purpose: Form 1099-DA, titled "Digital Asset Sales and Exchanges." This new form is specifically designed to capture the unique characteristics of digital asset transactions, including fields for transaction types, cost basis reporting, lot identification methods, and special designations for covered versus noncovered securities. Brokers must become familiar with Form 1099-DA's structure, as it differs meaningfully from traditional securities reporting forms like the 1099-B, reflecting the distinct nature of digital asset broker reporting requirements.

Handling Cost Basis and Lot Ordering

Cost basis tracking for digital assets presents unique challenges, particularly when assets move between platforms. The rules establish careful boundaries around what customer-provided information brokers can use and for what purposes, creating a nuanced framework that separates lot identification from basis reporting.

Cost Basis and Lot Identification in Digital Asset Broker Reporting: The Rules for Transferred-In Assets

Q4: For digital assets transferred-in from another platform, what is the crucial difference between a broker's use of customer-provided information for lot ordering versus for reporting cost basis on Form 1099-DA?

This distinction represents one of the most important nuances in the digital asset broker reporting framework. The IRS permits brokers to use customer-provided acquisition information - such as purchase dates, acquisition prices, or data received from a transferring broker - for the limited purpose of identifying which specific units (lots) were sold when a customer disposes of assets. This lot ordering function helps determine which of potentially many identical units acquired at different times should be matched to a sale transaction.

However, the same customer-provided information is explicitly prohibited from being used for the separate and mandatory function of reporting the actual cost basis on Form 1099-DA. When assets are transferred onto a broker's platform from external sources, the receiving broker lacks direct knowledge of the original acquisition terms. Even if the customer provides documentation claiming specific purchase prices and dates, the broker cannot report those values as the cost basis on the tax form.

The practical effect is asymmetric: a broker can use customer data to determine that "Lot A purchased on March 15" was the one sold (affecting holding period and identification), but cannot report the customer-claimed purchase price of that lot as the basis. For transferred-in assets where the broker has no direct acquisition knowledge, basis reporting is typically left blank or reported as unknown, even while the lot identification may be specified based on customer information.

This separation ensures that tax basis - which directly determines capital gains or losses - is reported only when brokers have reasonably reliable, firsthand knowledge, while still allowing practical lot tracking for assets moving between platforms.

Q5: Under what specific circumstances must a broker mark Box 8 on Form 1099-DA, and what is the rationale behind checking this box even if the customer information didn't change the outcome of the lot selection?

Box 8 on Form 1099-DA is specifically designated for indicating "broker relied on customer-provided acquisition information" for lot ordering purposes. The requirement to check this box is broader than many practitioners initially realize—it must be marked whenever customer-provided information was used in the lot selection process, regardless of whether that information ultimately altered which specific unit was identified as sold.

Consider a scenario where a customer provides acquisition dates for transferred-in Bitcoin units, but the lot selection method (such as FIFO) would have identified the same unit anyway based on transfer-in dates alone. Even though the customer information was technically redundant, Box 8 must still be checked because the broker considered and incorporated that external data into their determination process.

The rationale behind this seemingly strict requirement serves an important signaling function for IRS compliance review. When Box 8 is checked, it alerts tax authorities that the reported lot selection reflects customer-provided data rather than the broker's direct records. This transparency allows the IRS to apply appropriate scrutiny to potential basis mismatches or holding period discrepancies, knowing that the underlying acquisition data comes from external sources the broker couldn't independently verify.

This disclosure requirement also protects brokers by clearly documenting when they've relied on customer information for lot identification, distinguishing those situations from cases where the broker has complete firsthand knowledge of acquisition details.

Q6: If a single transaction involves multiple lots of transferred-in assets with different acquisition dates, how does a broker complete Form 1099-DA, specifically regarding the "transfer-in date"?

When customers sell multiple lots of transferred-in digital assets in a single transaction—for example, disposing of Bitcoin units that were transferred onto the platform on three different dates—brokers face a reporting challenge regarding date specificity. Form 1099-DA includes Box 12b, which requests the transfer-in date for assets not originally acquired through the reporting broker.

The IRS guidance addresses this complexity directly: when a single sale encompasses multiple lots with different transfer-in dates, the broker should report the entire transaction on one consolidated Form 1099-DA but must leave Box 12b blank. The rationale is straightforward—entering a single transfer-in date would be inaccurate and potentially misleading when no single date can properly represent the disposition.

This approach prioritizes accuracy over false precision. Rather than requiring brokers to either file multiple forms for what is economically a single transaction or to pick an arbitrary "representative" date, the rules acknowledge that some transactions involve complexity that cannot be captured in a single date field. Leaving the transfer-in date blank in these circumstances, while reporting the other transaction details completely, provides the most accurate representation of the economic reality.

Brokers should maintain detailed records showing the multiple transfer-in dates for their own lot tracking purposes, even though this granular detail doesn't appear on the filed 1099-DA form when multiple lots are involved.

Complexities of Form 1099-DA and Covered/Noncovered Securities

The transition period from pre-2025 holdings to post-2024 acquisitions creates a temporal divide in how digital assets are classified for reporting purposes. Understanding the strategic importance of segregating these asset classes on separate forms can preserve important penalty protections for brokers who choose to voluntarily provide additional reporting detail.

The Strategic Importance of Covered vs. Noncovered Digital Assets in Broker Reporting

Q7: When a customer sells a mix of "covered" and "noncovered" digital assets in a single transaction, why is a broker advised to file multiple Forms 1099-DA instead of a single aggregated form?

The distinction between covered and noncovered securities creates a strategic reporting consideration for digital asset brokers. "Covered" securities are digital assets acquired on or after January 1, 2025—these fall under the full mandatory reporting framework. "Noncovered" securities are assets purchased before 2025, for which basis reporting is optional rather than mandatory.

When a customer disposes of both types in a single transaction—perhaps selling a Bitcoin position accumulated over several years—a broker might be tempted to report the entire sale on one Form 1099-DA for administrative simplicity. However, this aggregation creates a significant compliance risk.

Form 1099-DA includes Box 9, designated for checking when reporting a "Noncovered Security." This checkbox serves a critical function: it signals to the IRS that the basis being reported is voluntary rather than mandatory, triggering special penalty relief provisions. If a broker combines covered and noncovered assets on a single form, they cannot accurately check Box 9 because the form includes both types. The result is that the entire reported basis is treated as if it were mandatory reporting, eliminating the penalty protection for any errors in the voluntarily reported noncovered portion.

The solution is to file separate Forms 1099-DA: one exclusively for the covered (post-2024) assets without Box 9 checked, and another exclusively for the noncovered (pre-2025) assets with Box 9 marked. This segregation preserves the distinct compliance treatment each portion deserves while providing complete reporting to both the customer and the IRS.

Q8: What specific penalty relief is preserved by separating the reporting of noncovered securities and checking Box 9 on Form 1099-DA?

The penalty relief at stake involves sections 6721 and 6722 of the Internal Revenue Code, which impose substantial penalties for incorrect information reporting. Section 6721 addresses failures to file correct information returns with the IRS, while section 6722 covers failures to furnish correct payee statements to taxpayers. These penalties can accumulate quickly, particularly for high-volume brokers processing thousands of transactions.

For noncovered securities, basis reporting is voluntary—brokers choose to provide this information as a service to customers and to promote tax compliance, but they're not legally required to do so. Recognizing this voluntary nature, the IRS provides relief from sections 6721 and 6722 penalties specifically for errors in reporting the basis of noncovered securities, provided the broker properly designates them as such.

The mechanics are straightforward: by filing a separate Form 1099-DA exclusively for noncovered securities and checking Box 9, the broker formally identifies that basis information as voluntarily provided. If the reported basis later proves incorrect—perhaps because the broker relied on incomplete customer records for pre-2025 acquisitions—the penalty relief shields the broker from the otherwise applicable fines for that inaccuracy.

This protection is particularly valuable during the transition period when brokers may have limited historical acquisition data for assets held before the digital asset broker reporting rules took effect. By maintaining separate reporting for noncovered assets, brokers can provide helpful basis information to customers while managing their own compliance risk exposure.

Special Asset Class Reporting: NFTs and Stablecoins

Not all digital assets fit neatly into fungible token categories. The IRS has crafted specific provisions addressing two asset classes with unique characteristics: non-fungible tokens that represent creative works or collectibles, and stablecoins designed to maintain price stability against fiat currencies. Each presents distinct reporting challenges requiring specialized approaches.

Unique Compliance Challenges for Specified NFTs and Qualified Stablecoins in Digital Asset Broker Reporting

Q9: What are the unique reporting requirements for a broker using the optional aggregate method when a customer sells a specified NFT they minted versus one they purchased?

Specified NFTs—non-fungible tokens that meet certain definitional criteria—present unique reporting challenges because they occupy a space between traditional collectibles and digital commodities. The IRS has created an optional aggregate reporting method for these assets, recognizing that individual transaction-by-transaction reporting may be impractical for certain NFT marketplace models.

However, this optional method requires careful differentiation based on the seller's relationship to the NFT's creation. When a customer sells an NFT they personally minted or created (the "first sale" by the creator), this represents the initial monetization of their creative work. For these first-sale transactions, brokers using the optional aggregate reporting method must report the gross proceeds exclusively in Box 11c of Form 1099-DA, which is specifically designated for this purpose. Crucially, Box 1f—the standard "Proceeds" field used for most sales—must be left blank for these minted-asset sales.

Conversely, when the same customer sells NFTs they previously purchased from others (subsequent sales in the chain of ownership), the proceeds are reported in the standard Box 1f, not in Box 11c. This distinction reflects the different economic nature of these transactions: creator sales involve converting creative output to income, while subsequent sales represent investment dispositions.

The practical implication for digital asset broker reporting is that if a single customer sells both types of NFTs—some they minted and others they collected—the broker must file two separate Forms 1099-DA to properly categorize the proceeds according to their economic nature. This segregation ensures appropriate tax treatment and provides the IRS with transparency regarding the character of the income being reported.

Q10: How is the 3% fluctuation rule applied over the consecutive 10-day period for a digital asset to qualify as a stablecoin for optional reporting?

Qualified stablecoins represent a unique asset class designed to maintain price stability by pegging their value to convertible currencies, typically the U.S. dollar. The IRS recognizes that these stability-focused assets may warrant simplified reporting treatment, but only if they genuinely maintain their peg. The test for this stability is the "3% fluctuation rule" measured over a consecutive 10-day period.

The mechanics of this test are more nuanced than a simple snapshot comparison. Throughout any calendar year, the stablecoin's value must not fluctuate by more than 3% from its pegged convertible currency value during any consecutive 10-day window. This means the IRS is examining rolling 10-day periods throughout the year—not just isolated moments in time.

Critically, the asset fails the qualification test only if its value deviates by more than 3% when measured across the entire duration of a 10-day period. A brief spike or dip that exceeds 3% for a few hours or even a day doesn't automatically disqualify the asset, provided the value stabilizes back within the 3% band before the 10-day window closes. The test looks at whether the maximum fluctuation sustained across any complete 10-day span exceeds the threshold.

For example, if a stablecoin temporarily drops to $0.96 (4% below its $1 peg) but recovers to $0.975 within eight days, and the full 10-day period shows a maximum sustained deviation of only 2.5%, the asset passes the test for that period. This approach recognizes that brief market disruptions or liquidity events shouldn't necessarily disqualify an asset that maintains general stability, while still ensuring that genuinely volatile assets don't receive preferential reporting treatment.

Q11: How does a broker's platform guarantee to buy back a qualified stablecoin at its pegged value simplify the stabilization mechanism test for their digital asset broker reporting obligations?

The 3% fluctuation test becomes significantly more manageable when a broker's platform offers a redemption guarantee. If a broker guarantees to purchase any unit of a specific stablecoin at its exact pegged value—such as guaranteeing to buy back each unit at precisely $1.00—throughout the entire calendar year, this guarantee creates a safe harbor for stabilization testing.

Under this scenario, the broker may determine whether the stablecoin meets the 3% fluctuation requirement based exclusively on transaction data from their own digital asset trading platform, effectively ignoring price fluctuations that may be occurring on external exchanges or platforms. The economic logic is sound: if the broker guarantees redemption at the pegged value, then from their customers' perspective, the asset maintains perfect stability regardless of broader market volatility.

This simplification substantially reduces the compliance burden for digital asset broker reporting. Instead of monitoring global price feeds across multiple exchanges and calculating rolling 10-day maximum deviations across the entire cryptocurrency ecosystem, the broker can focus solely on their own platform's trading data. If their platform shows the stablecoin maintaining the peg (because they're guaranteeing it), that's sufficient evidence of stabilization for their reporting purposes.

This provision recognizes that different market participants may experience different effective price stability for the same asset based on the terms of service their platform offers. A stablecoin that experiences significant volatility on decentralized exchanges might still qualify for simplified reporting treatment on a platform that guarantees redemption, reflecting the actual stability experienced by that broker's customers.

Reporting Transaction Fees Paid with Digital Assets

Transaction fees create unique reporting complications when they're paid with digital assets rather than traditional currency. The tax treatment varies significantly depending on how the fee payment is structured—whether assets are sold separately to generate fee payment, or whether they're withheld from assets received in an exchange. Understanding these scenarios is essential for accurate digital asset broker reporting.

Navigating the Reporting Nuances for Transaction Fees Paid with Digital Assets

Q12: When a customer disposes of a digital asset unit specifically to pay a transaction fee (not withheld from received assets), what is the mandatory lot selection rule that a broker must apply for determining the cost basis?

The first scenario involves treating the fee payment as a distinct, separate sale transaction. This occurs when a customer doesn't have sufficient fiat currency to cover the transaction fee, so they authorize the broker to sell a portion of their digital assets specifically to generate the cash needed for the fee. From a tax perspective, this represents a taxable disposition separate from the primary transaction the customer intended to execute.

When this separate sale occurs to pay the transaction fee, the broker faces a lot identification challenge if the customer holds multiple units of the same digital asset acquired at different times and prices. Unless the customer provides specific instructions identifying which particular unit should be sold to cover the fee—such as directing the broker to sell "the Bitcoin unit acquired on June 15, 2024" - the broker must apply the default lot selection methodology.

The IRS mandates that this default method is First-In, First-Out (FIFO). Under FIFO, the oldest units held by the customer are deemed to be sold first. So if a customer holds Bitcoin acquired in 2023, 2024, and 2025, and sells a unit to pay a transaction fee without specific lot identification, the broker must treat the 2023 Bitcoin (the first-in) as the unit sold. This determines both the holding period and the cost basis for that fee-payment sale.

This FIFO requirement for digital asset broker reporting serves administrative simplicity and consistency, ensuring that when customers don't provide specific guidance, there's a clear, standardized approach to determining which units were disposed of for fee payments.

Q13: If a unit of the newly acquired digital asset is withheld during an exchange to cover a transaction fee, what dual reporting exception and identification rule applies to the broker regarding that specific unit?

The second scenario presents a materially different structure and receives correspondingly different tax treatment. This occurs in exchange transactions - for example, when a customer trades Ethereum for Bitcoin, and the broker withholds a portion of the received Bitcoin to cover the exchange fee rather than requiring a separate payment.

In this situation, the IRS has established two critical provisions that simplify digital asset broker reporting. First, there's a reporting exception: the broker is not required to file a Form 1099-DA reporting the sale of the Bitcoin unit that was withheld to cover the transaction fee. This exception recognizes that the withholding is essentially a netted transaction - the customer never fully received those Bitcoin units before they were applied to the fee, making separate sale reporting unnecessarily complex.

Second, there's an identification rule that resolves potential ambiguity about which specific units were withheld. The withheld unit is deemed to be adequately identified as coming from the units that were acquired in that same exchange transaction. This means the broker doesn't need to apply FIFO or any other lot selection method to previously held Bitcoin; the withheld units are automatically treated as part of the newly received batch.

This dual framework significantly simplifies both reporting and basis tracking for exchange-related fees. The broker avoids filing an additional Form 1099-DA for what is essentially a transaction cost, while the identification rule provides clear guidance on acquisition date and basis determination for the withheld units. This treatment reflects the economic reality that withholding from received assets functions differently from conducting a separate sale to generate fee payment, warranting distinct rules in the digital asset broker reporting framework.

Conclusion

The new digital asset broker reporting requirements represent a comprehensive framework designed to bring cryptocurrency transactions into the traditional tax reporting infrastructure. Success in compliance requires understanding not just the basic requirements - such as who must file and when - but also the nuanced distinctions around cost basis versus lot ordering, the strategic implications of covered versus noncovered securities, and the specialized rules for unique asset classes.

As the January 1, 2025 effective date approaches, brokers should focus on system implementations that can handle these complexities: segregating covered and noncovered assets on separate forms, properly marking Box 8 and Box 9 indicators, applying correct lot selection methods for fee payments, and monitoring stabilization criteria for stablecoins.

The framework's detail reflects the IRS's recognition that digital assets present unique characteristics requiring tailored approaches rather than simply forcing cryptocurrency into securities reporting templates designed for traditional markets.

By mastering these digital asset broker reporting requirements, brokers can ensure compliance while providing their customers with accurate tax information, ultimately supporting the broader integration of digital assets into the regulated financial system.

If you're looking for more standard advice, read our common crypto tax FAQs to understand how the IRS handles crypto taxes.

Digital Asset Broker Reporting: IRS Rules Explained