Do Crypto Exchanges Need To File
1099-DA Online?

File 1099-DA Online

Crypto exchanges and digital currency providers would likely be required to
report with and file 1099-DA, the new IRS tax form, starting 2023. Are you ready?

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Form 1099-DA?

What is

According to the Criminal Investigation division of the IRS, a new tax form 1099-DA would be released later this year. This new tax form would specifically report payment information pertaining to digital assets. Hence, the tax return is named “1099-DA”, standing for “1099-Digital Assets”.


According to tax experts, the IRS Form 1099-DA would likely be released for official use in 2023, requiring taxpayers to file it in 2024.

Why Should Crypto Exchanges & Digital Asset
Providers Prepare For Form 1099-DA?

As the name suggests, Form 1099-DA would exclusively deal with cryptocurrencies, digital assets, digital currencies, and other crypto assets like Bitcoin, Dogecoin, Ethereum, and more.


As a result, platforms and entities that deal with crypto are required to report the payment information on Form 1099-DA.


Customers that purchase these cryptocurrencies will be required to treat the crypto assets just like any other “property”.


Hence, the IRS requires the crypto platforms to report the particulars of the transaction, including any capital gains, profits made on the base value of the digital asset upon title transfer, and other information on Form 1099-DA.


The TIN, legal name of the customer, address, and other Know Your Customer (KYC) information must be obtained by the crypto platforms from their customers in order to report the specific details of the transaction.


The scope of the reporting regime is yet to be disclosed by the IRS for public interpretation.


File Form 1099-DA?

Who Needs To

According to tax experts, Form 1099-DA would primarily require the crypto entities to file Form 1099-DA.


Popular crypto trading platforms like Coinbase, Binance, Kraken, Gemini, BlockFi, FTX, and other similar platforms will need to prepare, report, and file the new IRS Form 1099-DA with the IRS.


Even crypto broker entities like Robinhood Crypto, Webull Crypto, TradeStation Crypto, eToro, and others would be required to report with 1099-DA from the 2023 tax year.


Form 1099-DA Be Released?

When Will

Form 1099-DA would be released for official use in the next few months.


Reports suggest that the IRS is planning to delay the release of the new tax form 1099-DA to make it easy for taxpayers to prepare and file it in 2024 for the 2023 tax year.


As and when the specimen copy would be published by the IRS, tax experts at 1099DA.com would be able to provide more insights on the possibilities and scope of reporting.

What To Report On

IRS Form 1099-DA?

Payment information pertaining to digital asset transactions would likely be reported on Form 1099-DA.

While the IRS has not issued an official statement or instructions for the 1099-DA tax return, experts speculate that Form 1099-DA could likely report the summarized details of the digital asset transactions, payee information, the monetary value of the transactions, and other details, which would be necessary to compute the tax.

Note that this information is only tentative, the 1099-DA reporting requirements are yet to be defined by the IRS officially.

How To File
1099-DA Online?

When the IRS Form 1099-DA is available for official use,
crypto trading platforms and digital currency providers can
prepare and file their 1099-DA return either online through
the IRS e-filing system or by mailing the paper returns to
the IRS.

Crypto exchanges usually deal with a large number of
customers in a year. It would be more efficient to just switch
to the e-file system and eFile your 1099-DA returns with an
authorized agent of the IRS.

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