Section 6050I Guidance Updates

Author: Olya Veramchuk, Director of Tax Solutions

The US Department of Treasury and the IRS are working on an upcoming package of rules to implement through the infrastructure bill, signed in November 2021. However, according to Natasha Goldvug, Attorney-Adviser at the US Treasury Office of Tax Policy, the proposed regulations likely will not include guidance on a new requirement to report transactions involving more than $10,000 in cryptocurrency. Additionally, she  noted that the guidance on Section 6050I might be the next item addressed. 

Generally, Section 6050I outlines a reporting requirement for people who receive more than $10,000 in single or multiple related transactions while engaging in a trade or business. For example, a car dealer selling a car for at least $10,000 would be subject to this reporting requirement. Form 8300, used to report such transactions, must be filed with the IRS by the 15th day after the cash is received. Failure to furnish the form could result in criminal penalties. 

Section 6050I Guidance on Digital Assets

The amended Section 6050I proposed treating digital assets as “cash,” despite generally being treated as property for other tax purposes. The new information reporting must be supplied starting in 2024 for the tax year 2023.

The information contained in this bulletin provides only a general overview of current tax issues related to staking and shall in no event be construed as the rendering of professional advice or services. As such, the information provided in this bulletin should not be used as a substitute for consultation with professional advisors. Before making any decision or taking any action regarding your digital currencies or the tax treatment thereof, you should always consult with an appropriate, licensed tax, accounting, or other professional. To the fullest extent permitted by law, in no event will Lukka, Inc. (including its related entities, owners, agents, directors, officers, advisors, or employees) be liable to any reader of this bulletin or anyone else for any direct, indirect, or consequential loss or loss of profit arising from the use of this bulletin, its contents, its omissions, reliance on the information contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith.

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