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Full list of blows dealt to crypto by the Infrastructure bill

Most of us know that the [Infrastructure Investment and Jobs Act](https://en.wikipedia.org/wiki/Infrastructure_Investment_and_Jobs_Act) (IIJA), signed into law on Nov 15, 2021, has expanded the definition of “broker” in a way that might target miners, stakers, and DeFi platforms.

Some of us may know that it has also [criminalized as a felony](https://np.reddit.com/r/CryptoCurrency/comments/qo2job/the_infrastructure_bill_that_us_congress_passed/hl2auv4/) not reporting receipt of over $10k worth of digital assets within 15 days.

But there are three more important changes that apply to crypto ^[[1](https://taxnews.ey.com/news/2021-1538-senate-passed-infrastructure-bill-would-impose-information-reporting-requirements-on-sales-of-cryptocurrency-and-other-digital-assets)][[2](https://www.taxathand.com/article/20449/United-States/2021/Digital-assets-Infrastructure-bill-includes-information-reporting-requirements)][[3](https://www.millerkaplan.com/new-digital-asset-reporting-requirements-will-be-imposed-in-coming-years/)], which I haven’t seen discussed at all on this sub:

1. **Exchanges will have to report to the IRS transfers to wallets** (and to any address that’s not another exchange) [[discussion](https://www.reddit.com/r/Bitcoin/comments/r4zonq/full_list_of_blows_dealt_to_crypto_by_the/hmjpsc3/)]
2. You’ll no longer be allowed to close a losing position and claim the capital loss, if you reopen it within 30 days. This means **the “wash sale” rule now applies to crypto**, which is a problem for “gateway” coins (incl. BTC), which are used to access many other protocols, not necessarily as investments. [[discussion](https://www.reddit.com/r/Bitcoin/comments/r4zonq/full_list_of_blows_dealt_to_crypto_by_the/hmjpu4q/)]
3. **Exchanges will have to explicitly demand your SSN**, address, and other information via forms W-9, even if you’re a grandfathered customer without these details on file. [[discussion](https://www.reddit.com/r/Bitcoin/comments/r4zonq/full_list_of_blows_dealt_to_crypto_by_the/hmjpusm/)]

Which of these changes did you guys know about? Here’s a [one-question poll](https://forms.gle/rf9McYuh2hcomKyb6).



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27 Comments

  1. ## Exchanges will have to report to the IRS transfers to wallets, purchases with crypto

    From [Ernst&Young](https://taxnews.ey.com/news/2021-1538-senate-passed-infrastructure-bill-would-impose-information-reporting-requirements-on-sales-of-cryptocurrency-and-other-digital-assets):

    > A securities broker who transfers a “specified security” to another broker must send a transfer statement that provides the customer’s cost basis and holding period to the other broker. Nearly all securities transfers result in a transfer statement because transfers outside of the custodial system are rare. Transfer statements would be required for cryptocurrency as well if the bill is enacted, but the nature of transfers in the cryptocurrency market is quite different. Customers frequently move tokens from an exchange into their own electronic wallets. Accordingly, many transfers will not go to another broker, and the basis information would be lost. To prevent this loss, **the bill would amend IRC Section 6045A to require a broker that transfers digital assets to anyone other than another broker to file an information return with the IRS** that includes the information that otherwise would have been in a transfer statement.

    This means that any transfer from an exchange to your wallet, or someone else’s wallet, to a business, will have to be reported to the IRS. **Buying a cup of coffee will be reportable to the IRS by the exchange.**

    This is the exact amendment (from [Deloitte](https://www.taxathand.com/article/20449/United-States/2021/Digital-assets-Infrastructure-bill-includes-information-reporting-requirements)):
    > RETURN REQUIREMENT FOR CERTAIN TRANSFERS OF DIGITAL ASSETS NOT OTHERWISE SUBJECT TO REPORTING.—**Any broker**, with respect to **any transfer** (which is not part of a sale or exchange executed by such broker) during a calendar year of a covered security which is a **digital asset** from an account maintained by such broker **to an account which is not** maintained by, or an address not associated with, a person that such broker knows or has reason to know is **also a broker**, shall make a return for such calendar year, in such form as determined by the Secretary, showing the information otherwise required to be furnished with respect to transfers subject to subsection (a).

  2. I mine with a company in the Ukraine and all proceeds go directly to my hard wallet so no KYC needed – fuck the government. I hodl but I do have a cash out plan that involves a third world country where I have family. And did I say Fuck the government?

  3. Only way around this dumb bill is to buy mining hardware, mine alts (that are poised to skyrocket during a bull market) to a private wallet, and convert to Bitcoin. Its easy for the government to go after centralized exchanges and their customers, but much harder to go after decentralized entities like miners, validators, and DeFi exchanges.

    This is the nonsense government does, they just make it harder for everyone to make money and prosper under the guise of “safety” and “money laundering”

  4. If you intend on selling BTC for fiat in the future use a kyc exchange.

    If you intend on spending BTC then don’t kyc.

    If you do both keep the coins separate and use different anonymous email address for invoices…

  5. US citizens will start looking at foreign exchanges or exchanges that the US doesnt allow its citizens to use. This is going to cause a huge problem. How is this going to work with defi? I Bet the dumbass retards putting this bill together didnt think about that now did they?

  6. Holy shit yall are dumb..The feds let Billionaires get away without paying taxes for one reason. they give them millions of dollars in campaign money, that’s it. No government is gonna let millions of dollars go through their grubby hands without getting their cut. Til BTC companies and exchanges start buying politicians like every major industry in the country. We are at the bottom of the food chain and just have to eat it.

  7. ## Exchanges will have to explicitly demand your SSN
    If you’ve been in crypto for a while, you may still have accounts that were created before the KYC mania. Well, that will end. If you use a crypto exchange, and it hasn’t already collected a Form W-9 from you seeking your taxpayer identification number, expect it to do so.

    From [Ernst & Young](https://taxnews.ey.com/news/2021-1538-senate-passed-infrastructure-bill-would-impose-information-reporting-requirements-on-sales-of-cryptocurrency-and-other-digital-assets) on **Form W-9 collection**:

    > **The bill would require brokers to obtain a Form W-9**, _Request for Taxpayer Identification Number and Certification,_ from their US customers — both new and preexisting — or **withhold 24% of the proceeds of sales** (or risk being held liable for failing to do so). Current practice varies widely across the industry, but it appears that most exchanges do not collect Forms W-9 at onboarding. **Obtaining tax forms for existing accounts would be one of the largest challenges for the exchanges in implementing these rules.**

  8. ## “Wash sale” rule now applies to crypto

    From [Lexology](https://archive.vn/d5hES):

    Section 138152 of the [Build Back Better Act](https://en.wikipedia.org/wiki/Build_Back_Better_Act) (HR 5376) would amend Internal Revenue Code (Code) section 1091, which currently disallows losses for so-called “wash sales” of “stock or securities” […], to apply to
    * digital assets (“any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the treasury secretary”)
    * and to apply to acquisitions of substantially identical assets by related parties (spouse, dependent, a corporation, partnership, trust etc.)

    > Significantly, with respect to acquisitions of substantially identical assets by related parties, the Act would not permit a basis adjustment. That means that the loss is disallowed forever. As a result, *taxpayers will have to closely monitor activity by related parties—for example, activities by spouses or dependents on other trading platforms*.

    > Wash sales could be particularly difficult to track in the context of digital assets. There are a few cryptocurrencies (e.g., **BTC and ETH**) that are used to access many other protocols. For example, to access a DeFi protocol, a user might convert ETH to the crypto native to the DeFi platform. That means that a user would buy and sell these **”gateway” cryptocurrencies** much more frequently than others, potentially triggering the wash sale rule. **These do not appear to be the types of continuing investment transactions at which the wash sale rules were targeted.**

  9. I’m not complying with any of that garbage. This is an issue of freedom and liberty, and at this point my attitude toward the government trying to confiscate, tax, require registration and/or reporting, etc….my attitude is: Come and get it.

  10. meh. these are all annoyances that I’m already used to dealing with outside of crypto…

    also disincentivizing use of BTC as a “gateway” coin sounds like an unintentional win

What do you think?

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