The federal government will soon be increasing its regulation of cryptocurrency. Starting in January 2023, crypto brokers must observe new tax reporting requirements. These include providing investors with IRS Form 1099-B, which documents crypto profits and losses. Buying crypto generally isn’t taxable. However, trading it, converting it to cash and using it for purchases, may be. Regardless of the specific activity, investors must disclose any crypto ownership by checking a box on their tax returns. The new regulations are expected to yield $28 billion in new taxes over a decade and close several loopholes. More regulations from the IRS and SEC may be forthcoming.
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