US Tackles Crypto Tax Mess

The federal government is escalating efforts to make cryptocurrency investors comply with tax law, nearly 15 years after people started trading bitcoin. From a report: The Treasury Department proposed new rules Friday with twin goals: making it harder for crypto investors to dodge income taxes when they sell digital assets, and simplifying complicated tax messes for people who are trying to follow the law. When they are fully implemented, the rules will require crypto exchanges such as Coinbase to deal with the Internal Revenue Service in a manner similar to brokers who handle investors' stock and mutual-fund portfolios. The crypto exchanges will send annual reports on Form 1099s to the IRS and to taxpayers that show the gross proceeds from transactions. That starts in 2026 for tax year 2025. Later, they will start reporting how much customers paid for the assets, known as their cost basis. Capital gains are the difference between sale price and cost basis, and investors face federal taxes of up to 23.8%.

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