FORM 1099-DA Draft

The U.S. Department of the Treasury (USDOT) and the Internal Revenue Service (IRS) proposed regulations in Publication IR-2023-153 that will require brokers to report sales and exchanges of digital assets by customers on a new Form 1099-DA. The proposed regulations cover a wide range of digital asset issues. “These proposed regulations are designed to help end confusion involving digital assets and provide clear information and reporting certainty for taxpayers, tax professionals and others,” said IRS Commissioner Danny Werfel. “A key part of this effort fits in with the larger IRS compliance focus on wealthy taxpayers. We need to make sure digital assets are not used to hide taxable income, and the proposed regulations are designed to provide a clearer line of sight into activities by high-income people as well as others using them. We want to make sure everyone pays what they owe under the tax laws, and our research and experience demonstrate that third-party reporting improves compliance. We welcome comments on these proposed regulations as we work to finalize the rules in this complex and evolving area.”

Digital assets include but are not limited to the following:

  • Bitcoin
  • Convertible virtual currency
  • Crytocurrencies
  • Data
  • Documents
  • Manuscripts
  • Non-fungible tokens
  • Photos
  • Stablecoins 

The IRS released a draft version of Form 1099-DA on Apr. 18,2024. The form is similar to Form 1099-B, which is used to report capital gains and losses from stocks. Recipients will be sent Form 1099-DA for sales or exchanges of digital assets that take place on or after Jan. 1, 2025. The proposed regulations require brokers, digital asset trading platforms, digital asset payment processors and certain other digital asset hosted wallet providers, to report gross proceeds on the newly developed Form 1099-DA and to provide payee statements to customers. In some circumstances, brokers will be required to include gain, loss, and basis information for sales that take place on or after Jan. 1, 2026, on statements  so that customers have the information they need to prepare tax returns. Digital assets are increasingly important for individuals, businesses, and governments. To aid in reporting accuracy, investors should maintain detailed records of each cryptocurrency transaction, including the date of transaction, value in U.S. dollars (USD) at the time of the transaction, any gains or losses, and the purpose of each transaction.

SPS/GZ will report unfolding tax form filing requirements as they become available. We are a full-service tax reporting and stock plan administration firm that provides personalized service and exceptional support, utilizing state-of-the-art technology to business clients of all sizes. We create and e-file, various 1099s, including 1099-NEC, Forms 1042-S, 1098-T, Affordable Care Act tax forms, and Forms 3921 and 3922. Our complete and affordable solution allows administrators to simply upload their tax form data file to our secure portal in a few simple steps and we handle everything else to keep your organization compliant. Contact us today at sales@greenzapato.com or call at (888)375-3049. 

Organizations & Accolades

  • Link to aicpa.org
  • Link to healthcarereformcenter.org
  • Link to wellnessassociation.com
  • Link to icpas.org
  • Link to naspp.com
  • Link to nceo.org
  • Link to scu.edu

Contact us to learn how SPS/GZ can be your company’s trusted partner for stock plan administration and tax form reporting services.