{"id":7490,"date":"2024-01-06T07:10:42","date_gmt":"2024-01-06T07:10:42","guid":{"rendered":"https:\/\/www.irstaxapp.com\/?p=7490"},"modified":"2024-01-12T07:13:34","modified_gmt":"2024-01-12T07:13:34","slug":"cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/","title":{"rendered":"Cryptocurrency Alert! New $10k Reporting for Businesses in 2024!"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><picture><source srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-1024x538.webp 1024w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-300x158.webp 300w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-768x403.webp 768w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-150x79.webp 150w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-750x394.webp 750w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-1140x599.webp 1140w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting.webp 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" type=\"image\/webp\"><img src=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-1024x538.png\" height=\"538\" width=\"1024\" srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-1024x538.png 1024w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-300x158.png 300w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-768x403.png 768w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-150x79.png 150w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-750x394.png 750w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting-1140x599.png 1140w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2024\/01\/crypto-reporting.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" class=\"wp-image-7493 sp-no-webp\" alt=\"cryptocurrency\" decoding=\"async\" loading=\"lazy\"  > <\/picture><\/figure>\n\n\n\n<p>Are you in the trading or business? Then, be ready to comply with a new $10K reporting rule effective from 1st January 2024.? The new law  is that anyone who carries trade or business and receives more than  $10,000 in form of any digital assets (cryptocurrency coins, tokens or NFTs)  must report the transaction in Form 8300 with the IRS.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote\">\n<p class=\"has-black-color has-text-color has-background\" style=\"background-color:#ffe4eb\">This complexity in distinguishing between these types of transactions factored into the IRS decision to delay the reporting requirements an additional year and to <strong>plan for a threshold of $5,000 for 2024<\/strong> in order to phase in implementation. The IRS invites feedback on the threshold of $5,000 for tax year 2024 and other elements of the reporting requirement, including how best to focus reporting on taxable transactions.<\/p>\n<cite><a href=\"https:\/\/www.irs.gov\/newsroom\/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation\" target=\"_blank\" rel=\"noopener\">News on IRS website <\/a><\/cite><\/blockquote>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-662d973f095a6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662d973f095a6\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/#Legislation_for_Receipt_of_Crypto_10K_Reporting\" title=\"Legislation for Receipt of Crypto $10K Reporting\">Legislation for Receipt of Crypto $10K Reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/#Who_Must_Report_Digital_Assets_Receipt_Exceeding_10K\" title=\"Who Must Report Digital Assets Receipt Exceeding $10K?\">Who Must Report Digital Assets Receipt Exceeding $10K?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/#How_do_you_report_the_receipt_of_cryptocurrency_to_the_IRS\" title=\"How do you report the receipt of cryptocurrency to the IRS?\">How do you report the receipt of cryptocurrency to the IRS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/#Is_there_a_time_limit_to_report_cryptocurrency\" title=\"Is there a time limit to report cryptocurrency?\">Is there a time limit to report cryptocurrency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/#What_are_the_penalty_consequences_for_non-reporting\" title=\"What are the penalty consequences for non-reporting?\">What are the penalty consequences for non-reporting?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/#How_does_the_new_reporting_rule_affect_crypto_investors\" title=\"How does the new reporting rule affect crypto investors?\">How does the new reporting rule affect crypto investors?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.irstaxapp.com\/cryptocurrency-alert-new-10k-reporting-for-businesses-in-2024\/#How_Does_the_New_Rule_of_Reporting_Crypto_Transactions_Affect_Common_Investors\" title=\"How Does the New Rule of Reporting Crypto Transactions Affect Common Investors?\">How Does the New Rule of Reporting Crypto Transactions Affect Common Investors?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legislation_for_Receipt_of_Crypto_10K_Reporting\"><\/span>Legislation for Receipt of Crypto $10K Reporting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>This requirement parallels existing cash reporting rules, reflecting the recognition that cryptocurrency must report the recency as a legitimate payment instrument.This new law treating crypto transactions similar to cash transactions for reporting purposes was introduced via the Infrastructure Investment and Jobs Act of 2021 (IIJA). Consequently, the definition of &#8220;cash&#8221; given in section 60501(d) now includes &#8220;Digital Asset&#8221;.The definition is as follows:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-black-color has-text-color has-background\" style=\"background-color:#e1f1fb\">\n<p class=\"has-black-color has-text-color\"><em>(d) Cash includes foreign currency and certain monetary instruments. For purposes of this section, the term &#8220;cash&#8221; includes&#8211;<\/em><\/p>\n\n\n\n<p><em>(1) foreign currency,<\/em><\/p>\n\n\n\n<p><em>(2) to the extent provided in regulations prescribed by the Secretary, any monetary instrument (whether or not in bearer form) with a face amount of not more than $10,000, and<\/em><\/p>\n\n\n\n<p><em>(3) any digital asset (as defined in&nbsp;<\/em><a href=\"https:\/\/www.taxnotes.com\/research\/federal\/usc26\/6045#cp0p-0000115\" target=\"_blank\" rel=\"noreferrer noopener\"><em>section 6045(g)(3)(D)<\/em><\/a><em>).<\/em><\/p>\n<\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_Must_Report_Digital_Assets_Receipt_Exceeding_10K\"><\/span>Who Must Report Digital Assets Receipt Exceeding $10K?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The rule of reporting &#8220;cash&#8221; or &#8220;digital asset &#8221; applies only when :<\/p>\n\n\n\n<ol>\n<li>You are a US person ; <strong>and<\/strong><\/li>\n\n\n\n<li>You are carrying trade or business ; <strong>and<\/strong><\/li>\n\n\n\n<li>In the course of such business or trade, you received $10K or more from another person who is a US person or entity.&nbsp;<\/li>\n<\/ol>\n\n\n\n<p>When all the three conditions are satisfied , you have obligation to file return in Form 8300 to the IRS.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_do_you_report_the_receipt_of_cryptocurrency_to_the_IRS\"><\/span>How do you report the receipt of cryptocurrency to the IRS?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f8300.pdf\" target=\"_blank\" rel=\"noopener\">Form 8300<\/a>, traditionally used for reporting cash transactions exceeding $10,000, has to be used for reporting receipt of &#8220;digital asset&#8221; exceeding $10,000 value. IRS has published the new Form 8300 in December 2023 .You&nbsp;<strong>must&nbsp;<\/strong>electronically file (e-file) Forms 8300 if :<\/p>\n\n\n\n<ol>\n<li>you&#8217;re required to e-file other information returns, such as Forms 1099 series and Forms W-2.  or <\/li>\n\n\n\n<li>If you&#8217;re required to file at<strong> least 10 information returns<\/strong> of one or more type(s) other than Form 8300 during a calendar year.<\/li>\n<\/ol>\n\n\n\n<p>In other case, you can file For, 8300 , electronically. But remember , If you are supposed to e-file by rule , but file by paper and you don&#8217;t have a waiver or religious exemption, you will be subject to a failure to file penalty.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_there_a_time_limit_to_report_cryptocurrency\"><\/span>Is there a time limit to report cryptocurrency?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Reporting of cash or &#8220;digital assets&#8221; exceeding $10,000 must be done <strong>within 15 days<\/strong> of receiving the cash or &#8220;digital assets&#8221;. Further , there is a time limit for record keeping of filed Forms 8300. You must keep a copy of Form 8300 for five years. Confirmation receipts is not considered . You should associate the confirmation number with the saved copy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_penalty_consequences_for_non-reporting\"><\/span>What are the penalty consequences for non-reporting?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 6721 of the Internal Revenue Code (IRC) outlines the civil <a href=\"https:\/\/www.irstaxapp.com\/2020-failure-to-file-penalty-calculator\/\">penalties for not filing a return<\/a> in Form 8300 by a person carrying business or trade. The following penalties are prescribed:&nbsp;<\/p>\n\n\n\n<ul>\n<li>&nbsp;Up to $280 per occurrence, not to exceed $3,302,000 in a calendar year.<\/li>\n\n\n\n<li>If the IRS determines that the failure to file Form 8300 was intentional, penalties equal to the amount of cash (or cryptocurrency) received in the transaction are applicable for each deliberate failure.<\/li>\n\n\n\n<li>Additionally, the IRS can impose criminal fines of up to $25,000 for individuals and $100,000 for corporations and imprisonment for up to five years for &#8220;wilful non-compliance&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_does_the_new_reporting_rule_affect_crypto_investors\"><\/span>How does the new reporting rule affect crypto investors?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In cryptocurrency, you do various things, like trading cryptocurrencies, staking, lending, swapping and mining. But the new law of reporting digital assets is applicable, in my considered opinion, to the following class of persons :<\/p>\n\n\n\n<ol>\n<li>If you <a href=\"https:\/\/www.irstaxapp.com\/sell-of-cryptocurrency\/\">trade cryptocurrencies <\/a>or NFTs, i.e. showing income in your tax return as &#8220;business income&#8221; on gains of such transaction and receiving more than $10,000 for swapping the cryptocurrencies. If you only invest and declare gains as &#8220;capital gains&#8221;, this law does not apply to you.&nbsp;<\/li>\n\n\n\n<li>If you are into mining cryptocurrencies and receive a mining reward exceeding $10,000.<\/li>\n\n\n\n<li>If you are carrying on any online business or freelancing jobs for which you charge or accept consideration in the form of digital assets (cryptocurrencies), the receipt is more than $10,000 from a payer in a single billing.&nbsp;<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Does_the_New_Rule_of_Reporting_Crypto_Transactions_Affect_Common_Investors\"><\/span>How Does the New Rule of Reporting Crypto Transactions Affect Common Investors?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Even though an investor in digital assets (cryptocurrencies or NFTs) is not required to report any receipts exceeding $10,000 (as a rule applies to the person carrying business or trade and payment in cryptocurrencies must be part of trade or business ), IRS will now know many people who paid in form to digital asset to any person carrying on trade or business.<\/p>\n\n\n\n<p>For example, if you pay a crypto exchange with coins valued at more than $10,000, you will require the crypto exchange to report the receipt within 15 days by filing form 8300. Once they do that, the IRS will know the following details, for which Part II of the form 8300 has fields:<\/p>\n\n\n\n<ol>\n<li>Date of the transaction<\/li>\n\n\n\n<li>Fair market value of the cryptocurrency received on the date of the transaction<\/li>\n\n\n\n<li>The total amount of the cryptocurrency received in USD<\/li>\n\n\n\n<li>Name and address of the payer (sender of the cryptocurrency)<\/li>\n\n\n\n<li>Payer&#8217;s taxpayer identification number (SSN or ITIN)<\/li>\n\n\n\n<li>Description of the property or service for which the payment was made<\/li>\n<\/ol>\n\n\n\n<p>Later on, the IRS may use these data for several examinations, like if you file a tax return, whether you showed crypto-related income, etc.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you in the trading or business? Then, be ready to comply with a new $10K reporting rule effective from 1st January 2024.? The new law is that anyone who carries trade or business and receives more than $10,000 in form of any digital assets (cryptocurrency coins, tokens or NFTs) must report the transaction in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7495,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3848],"tags":[],"amp_enabled":false,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/7490"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=7490"}],"version-history":[{"count":5,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/7490\/revisions"}],"predecessor-version":[{"id":7504,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/7490\/revisions\/7504"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/7495"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=7490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=7490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=7490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}