IRS issues rules on digital asset reporting, says front-ends are brokers
https://cointelegraph.com/news/irs-final-regulations-digital-asset-reporting-brokers
The United States Internal Revenue Service (IRS) has issued final regulations requiring brokers to report digital asset transactions, expanding existing reporting requirements to include front-end platforms, such as decentralized exchanges.
Set to take effect in 2027, the rules mandate that brokers disclose gross proceeds from sales of cryptocurrencies and other digital assets, including information regarding taxpayers involved in the transactions.
The final regulation says “the only DeFi participants that are treated as brokers [...] are trading front-end service providers.”
The document does not directly apply to all DeFi applications and their level of decentralization, focusing on front-ends as a source of information and tax disclosure.
The reporting requirements apply to front-end platforms that facilitate transactions involving digital assets for customers, such as decentralized exchanges.
The definition encompasses platforms performing intermediary functions in facilitating transactions, including a group of persons facilitating transactions “whether or not the group operates through a legal entity.”
Under the new rules, if a DeFi platform is involved in facilitating the exchange or sale of digital assets — even through smart contracts — and it exercises sufficient control or influence over the transaction process, it could meet the definition of a broker.
originally posted at https://stacker.news/items/827198
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npub1hn…whtl5
2024-12-28 02:37:00
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npub1hn4zhxzsd5w4m5kvq326gqnsrc6zcakhparw8pee4tw7wlxw70ysawhtl5Published at
2024-12-28 02:37:00Event JSON
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"content": "IRS issues rules on digital asset reporting, says front-ends are brokers\nhttps://cointelegraph.com/news/irs-final-regulations-digital-asset-reporting-brokers\n\nThe United States Internal Revenue Service (IRS) has issued final regulations requiring brokers to report digital asset transactions, expanding existing reporting requirements to include front-end platforms, such as decentralized exchanges.\n\nSet to take effect in 2027, the rules mandate that brokers disclose gross proceeds from sales of cryptocurrencies and other digital assets, including information regarding taxpayers involved in the transactions.\n\nThe final regulation says “the only DeFi participants that are treated as brokers [...] are trading front-end service providers.”\n\nThe document does not directly apply to all DeFi applications and their level of decentralization, focusing on front-ends as a source of information and tax disclosure.\n\nThe reporting requirements apply to front-end platforms that facilitate transactions involving digital assets for customers, such as decentralized exchanges.\n\nThe definition encompasses platforms performing intermediary functions in facilitating transactions, including a group of persons facilitating transactions “whether or not the group operates through a legal entity.”\n\nUnder the new rules, if a DeFi platform is involved in facilitating the exchange or sale of digital assets — even through smart contracts — and it exercises sufficient control or influence over the transaction process, it could meet the definition of a broker.\n\noriginally posted at https://stacker.news/items/827198",
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