IRS Introduces New Crypto Tax Reporting Rules with Form 1099-DA
The IRS has begun issuing Form 1099-DA, a new tax form for digital asset transactions that marks the end of crypto's anonymous era. This form reports gross proceeds from broker transactions but does not include cost basis information, potentially leading to overstatements of taxable gains on users' returns in 2025. The discrepancy arises because the IRS receives only sale prices without accounting for what investors paid initially. For 2026 and beyond, more detailed reporting will begin as part of regulations under the Infrastructure Investment and Jobs Act. Starting next year, cost basis information must be included on these forms, which means taxpayers' records from now until December 31 are critical to ensure consistency between their returns and IRS data. The new rules align crypto with traditional securities in terms of tax reporting obligations. However, this shift could lead to confusion or errors if investors do not carefully reconcile the figures reported by brokers against their own transaction histories.
Topics: 1099-DA cost basis reporting crypto irs