New IRS Rule for DeFi Brokers: What You Need to Know Before 2027?

CoinMarketCap
2024-12-28
  • The IRS has introduced DeFi platforms to the existing tax framework.
  • New tax rules for DeFi platforms will take effect from 2027.
  • The IRS will treat DeFi platforms facilitating transactions as brokers.

The U.S. Treasury Department, through the Internal Revenue Service (IRS), has finalized regulation integrating decentralized finance (DeFi) platforms into the existing tax framework. In a recent report, the regulatory agency noted that the new rules will be implemented in 2027, allowing the platforms to organize their data for proper reporting.

It is worth clarifying that the new regulation targets “trading front-end service providers,” which the IRS has classified as brokers due to their intermediary roles in facilitating digital asset transactions. The IRS believes that this classification will improve tax compliance within the growing DeFi sector.

According to the IRS, the new rule classifies platforms offering digital assets sales or exchanges as brokers, regardless of whether they use smart contracts. Further, as long as these platforms exert sufficient control over transactions, they fall under the IRS’s definition of brokers, established nearly …

The post New IRS Rule for DeFi Brokers: What You Need to Know Before 2027? appeared first on Coin Edition.

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