President Joe Biden signed a $1.2 trillion bipartisan infrastructure bill on Nov. 15 — and it includes some new legislation crypto investors should know about.
The new law will require brokers — aka cryptocurrency exchanges — to issue a 1099-B. In other words, crypto exchanges will now be required to notify the IRS directly of crypto transactions. “The bill will signify the end of hiding many gains for many crypto investors,” says Grant Maddox, an independent CFP based in South Carolina.
This will in turn create tax reporting challenges for many crypto investors, Maddox says. For investors who use their own crypto wallet, the information reported to the IRS on the 1099 form will be prone to inaccuracy since the exchanges reporting on trading activity will have a limited view into what these investors paid for crypto in the first place.
Before You Invest In Crypto
Experts say it’s smart to keep your crypto investments under 5% of your overall portfolio. Crypto prices fluctuate wildly by the day, and experts also say you’d be smart not to invest more than you’d be OK losing if the market dropped out altogether. Crypto investments should also never get in the way of other financial priorities like saving for…
