Digital assets are generally treated as property for tax purposes. Previously known as virtual currencies, digital assets are defined as any digital representation of value that is not cash and is recorded on a cryptographically secured distributed ledger or any similar technology.
Pursuant to the Infrastructure Investment and Jobs Act (IIJA, P.L. 117-58), digital asset brokers are persons responsible for regularly providing services effectuating transfers of digital assets. Prior to the IIJA, Code Sec. 6045(c)(1)‘s definition of a broker included a dealer, a barter exchange, and a person who (for consideration) regularly acts as a “middleman” with respect to property or services.
- Proposed broker guidance
- Final custodial broker regs
- Front-end services
- Applicability date and transition relief
To dig deeper, visit the original article on the Thomson Reuters blog.