Digital Nomad
Using Final Regulations & Transitional Relief to Master Digital Asset Reporting
IRS final regs and notices offer relief and clarity for taxpayers and brokers on digital asset reporting—learn how to stay compliant without penalties.
By NomadicTax Research Team • 5-8 min read • November 15, 2025
## Overview: Reporting Digital Assets & Relief for Brokers
The IRS recently implemented **final regulations** under **Section 6045 of the Internal Revenue Code (IRC)**, requiring **brokers**, including digital asset trading platforms and certain wallet providers, to report **gross proceeds** (and in some cases adjusted basis) on digital asset sales starting **January 1, 2025**. ([irs.gov](https://www.irs.gov/irb/2025-04_IRB?utm_source=openai))
To ease transition, the IRS issued **Notice 2024-56**, providing **penalty and backup withholding relief** to brokers who make a **good faith effort** to comply during calendar year 2025. ([irs.gov](https://www.irs.gov/irb/2024-29_IRB?utm_source=openai)) Brokers who can’t get certified TINs immediately aren’t immediately penalized. ([irs.gov](https://www.irs.gov/irb/2024-29_IRB?utm_source=openai))
## What Taxpayers & Brokers Should Know Today
- **For brokers**: compliance begins Jan 1, 2025—ensure systems can file **Form 1099-DA**, furnish payee statements, and implement reporting of digital asset proceeds. ([irs.gov](https://www.irs.gov/irb/2025-04_IRB?utm_source=openai))
- **For taxpaying individuals**: even if your broker isn’t yet setup, you must still report gains, losses, and ensure you're receiving correct forms. Be alert to when/if you get a 1099-DA.
## Transitional Relief Details
- Relief from penalties applies for calendar year 2025 if broker acts in **good faith**. That includes accurate and timely filing/furnishing. ([irs.gov](https://www.irs.gov/irb/2024-29_IRB?utm_source=openai))
- Backup withholding under section 3406 is deferred for sales of digital assets during 2025 while brokers build capacity. ([irs.gov](https://www.irs.gov/irb/2024-29_IRB?utm_source=openai))
- Relief does not cover all reporting rules—some older rules like FIFO or basis allocation still apply, and basis rules under 1.1012-1 are separate. ([irs.gov](https://www.irs.gov/irb/2025-04_IRB?utm_source=openai))
## Practical Example
**Scenario**: Alice owns digital assets via two platforms. One broker is fully implementing 1099-DA, the other is still building compliance. For transactions in 2025:
- On Platform A: she should receive proper reporting and can rely on 1099-DA.
- On Platform B: she must still track her gains/losses independently and document basis in case of missing forms. Relief for brokers doesn’t waive her filing obligations.
## Tips to Comply & Avoid Misreporting
- **Maintain detailed records** of purchase date, purchase price, wallet or account, and any amounts received or transferred.
- **Check platforms’ reporting status** ahead of filing season: if they plan to issue 1099-DA, confirm what timeframe and what info they’ll include.
- **Track cost basis carefully**—especially where brokers allow multiple allocation methods (FIFO, specific ID, etc.).
- **File accurately even without forms**—if you don’t receive required statements, but had sales, declare income and attach explanations if needed.
## Why This Matters for Tax Planning & Digital Nomads
Digital nomads often engage in cross-jurisdictional trading, payments, or sling assets from foreign servers. Changes in reporting affect how foreign tax credits, withholding, and treaty benefits are claimed. Then, having clean bases, correct documentation, and knowing where reporting responsibility lies avoids audits or penalties.
**Bottom line**: the new regulations under Section 6045 raise the importance of accurate, documented digital asset activity—and the IRS is giving relief to help make systems ready. Be proactive, stay informed, and don’t let missing forms lead to tax surprises.