IRS Is Getting Intense With The Crypto Hide and Seek Game

Jul 4, 2024, 2:12PM
1 min, 31 sec READ
by Editor

The American Internal Revenue Service has announced much tougher tracking on income gained from cryptocurrency investments.

Alright, listen up, crypto folks. The IRS just dropped some serious bombshells about how they're gonna be tracking your digital dough.

Let's break it down: starting in 2026, crypto brokers are going to be spilling the beans on your trades. They'll be sending the IRS all your juicy details on Form 1099-DA, including how much you made from selling your digital assets.

And get this: in 2027, they'll be ratting out your cost basis as well. Yeah, Uncle Sam wants to know exactly what you paid for those tokens.

The IRS is making clear that they're serious about cracking down on crypto tax evasion. They've already hired a couple of ex-crypto executives to help them navigate this wild world, and they're using the Inflation Reduction Act as their weapon of choice.

Changes Are Coming Soon

Now, you might be thinking, "Sweet, I have some time." Think again. You've got a little over a year to get your ducks in a row.

The IRS is urging you to clean up your act and establish a "reasonable allocation" for your crypto holdings before January 1st, 2025. They're basically saying, "Don't wait until the last minute."

Better Have Your Records

Here's the deal: if you haven't been keeping track of your cost basis, you're gonna have to do some serious digging. Think of it as an archaeological dig, unearthing the records of every crypto transaction you've ever made.

And let me tell you, the IRS isn't messing around. If you can't prove your cost basis, they're gonna assume it's zero, which means you're gonna owe a whole lot more in taxes.

So buckle up, buttercup. The IRS is coming for your crypto. And they're coming hard.

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.