The IRS has made efforts to reduce the burden on users of stablecoins, especially when they are used to purchase other tokens and for payments. Individuals who do not earn more than $10,000 from stablecoins in a year are exempt from reporting requirements. Sales of stablecoins, which are common in the crypto market, will be reported collectively as an aggregate instead of individual transactions. However, more advanced and high-volume stablecoin investors will not qualify for this exemption.
The IRS stated that stablecoins fit within the definition of digital assets as they are digital representations of fiat currency values recorded on secure distributed ledgers. Despite their stable value, these tokens cannot be exempted from reporting. The IRS also mentioned that disregarding these transactions would eliminate valuable information that the IRS uses to ensure taxpayer compliance with reporting obligations.
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