IRS grants temporary relief on crypto tax reporting rules amid legal challenges
The Internal Revenue Service (IRS) issued temporary relief on crypto cost-basis reporting rules, potentially averting increased tax liabilities for digital asset investors.
The decision reflects the agency’s recognition of the complexities in crypto taxation and the need for regulatory adaptability in response to evolving markets.
Tax relief
The relief postpones the implementation of a rule that would have mandated centralized crypto exchanges to default to the First In, First Out (FIFO) accounting method for capital gains calculations. FIFO typically assumes the oldest assets are sold first, often leading to higher taxable gains during market upswings.
This extension will remain in place until Dec. 31, 2025, allowing brokers additional…
