Cryptocurrency Fans Should Stop Fearing Regulation
The Build Back Better Act has one IRS change that could change the crypto game
My entire crypto portfolio is worth less than $200. Maybe that’s why I’m not outraged about the potential change to the IRS definition of “Broker” that could result in government oversight and tax penalties (or worse) for crypto transactions over $10,000.
I’ve been aware of this rule since it’s long applied to standard transactions. Any transaction in which you receive over $10,000 (the original language has “in coins or currency,” which makes me think of a comically large and heavy bag of coins) must be reported to the IRS. I have a vague recollection of a TV show or movie where they wrote a check for $9,999 to avoid this rule.
By redefining brokers to, I think, potentially include crypto wallets like Coinbase, that $10K-and-up scrutiny could extend to a whole lot of crypto activity. (Full disclosure: I’ve been scanning the Act’s text for hours and still can’t find the exact text describing this change.)
Reports I read say that crypto investors will have a tough time complying with some of these regulations (which may include revealing social security numbers and emails for those receiving the funds) and, because not complying could be a felony, they…
