Digital Asset Broker Reporting Update
Author: Annette Nellen
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Law Updates for EAs and OTRPs
2 hours Federal Tax Updates for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2027 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
The broker reporting of digital asset changes enacted in late 2021 led to extensive proposed regulations in August 2023 and likely final regulations in fall 2024. These regulations cover many digital asset transactions but not all of them. The proposed regulations provided different basis tracking rules than were in the IRS virtual currency FAQs released in 2019. This course covers key aspects of the broker reporting rules and related regulations on amount realized and basis, what transactions will be reported on Form 1099-DA and which will not and recordkeeping considerations for due diligence.
Publication Date: October 2024
Topics Covered
- Timeline of digital asset guidance and actions from IRS and effective dates of final broker reporting regs and related guidance
- Outline of final broker reporting regulations
- Related guidance issued along with final regulations
- Definitions to understand final regulations
- What's reported on Form 1099-DA
- Amount realized and basis final regulations
- Safe harbor of Rev. Proc. 2024-28 for taxpayers using "universal" approach to basis tracking before 2025
- Related guidance still needed for IIJA digital asset changes
- Due diligence and other practical considerations in serving clients with digital assets
Learning Objectives
- Explain the purpose, operation and key compliance aspects of the broker reporting regulations for digital assets
- Identify key terms used in the reporting rules
- Explain the safe harbor of Rev. Proc. 2024-28 that requires many taxpayers to take action by 1/1/25
- Explain recordkeeping requirements for holders of digital assets, which transactions are reported on Form 1099-DA (and are not), and reconciliation actions that should be performed before filing income tax returns
- Identify due diligence considerations in dealing with tax reporting of digital asset transactions
Level
Update
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
Basic understanding of digital assets such as virtual currency.
Advance Preparation
None
