CLARITY Act: Potential US Tax Implications for Digital Asset Market Participants - Skadden, Arps, Slate, Meagher & Flom LLP
The CLARITY Act proposes new tax reporting rules for digital assets, including broker reporting on Form 1099-DA, cost basis tracking, wash sale rules, and staking rewards treatment. It affects crypto exchanges, DeFi protocols, and traders.
Aforeworn detected this change in the Crypto & DeFi Tax Reporting space on July 6, 2026 and published this briefing so affected operators are forewarned rather than caught off guard. It is rated High urgency. Crypto exchanges/brokers, DeFi protocols, accounting firms, high-volume traders should confirm how it applies to their specific situation before acting. There is a time constraint attached: Proposed effective date for tax years beginning after December 31, 2024 (likely 2025 filings).. Acting after that point can mean penalties, a lapsed licence, or lost eligibility — exactly the kind of surprise Aforeworn exists to prevent. Aforeworn monitors Crypto & DeFi Tax Reporting continuously and turns every detected change into a plain-English briefing like this one, so you always know first. Forewarned is forearmed.
What changed
New reporting requirements under the CLARITY Act: brokers must report digital asset transactions on Form 1099-DA, cost basis methods are specified, wash sale rules apply to digital assets, and staking rewards are taxable upon receipt.
Who it affects
Crypto exchanges/brokers, DeFi protocols, accounting firms, high-volume traders
What you must do
Review current tax reporting processes and update systems to comply with new Form 1099-DA requirements, implement cost basis tracking, and adjust for wash sale rules.
Deadline
Proposed effective date for tax years beginning after December 31, 2024 (likely 2025 filings).
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