IRS and Kraken Guide: New Crypto Tax Rules and Reporting Responsibilities for U.S. Investors
Starting in 2025, the IRS will require U.S. crypto investors to adopt wallet-based cost tracking for tax purposes, replacing the previous Universal tracking method. This change highlights the increased scrutiny on crypto profits as they gain value. Kraken has released a tax guide to help investors navigate these new requirements for the 2024 tax year. The guide elaborates on the IRS’s classification of crypto as property and distinguishes between capital gains and income tax related to different crypto activities. It also emphasizes the importance of accurate transaction records to avoid significant penalties. As tax platforms like Koinly adapt to the changes, this evolution in tax regulation marks a growing global trend toward stricter crypto taxation. Traders should remain vigilant of such developments to minimize their tax liability.
Neutral
The introduction of new IRS regulations requiring wallet-based cost tracking signifies an increase in the oversight on crypto taxation, which can influence trader behavior as they adjust to remain compliant. However, this increased regulation is part of a broader global trend that traders have been anticipating, thus having a neutral impact overall. The release of Kraken’s tax guide provides clarity and resources to investors, facilitating compliance and minimizing risk of penalties, but does not directly impact market sentiment or prices in the short term. In the long term, as compliance tools improve and become more normalized, market stability may increase.