Starting with the 2026 tax filing season (covering 2025 transactions), cryptocurrency exchanges are required to report your trades to the IRS on a new standardized form: Form 1099-DA, “Digital Asset Proceeds From Broker Transactions.” If you’ve ever traded, sold, or swapped crypto, this changes how much visibility the IRS now has into those transactions — and what you need to check before filing.
What Form 1099-DA Reports
Covered brokers — centralized exchanges like Coinbase and Kraken, hosted wallet providers, and digital asset payment processors — must report the gross proceeds from your digital asset sales, meaning the total dollar value of crypto sold for cash or exchanged for another cryptocurrency. Brokers are required to send you a copy of what they report to the IRS by February 17, 2026.
The Cost Basis Gap
For 1099-DA forms covering 2025 transactions, cost basis information will generally be absent from the form itself. That means the form shows what you received from a sale, but not necessarily what you paid to acquire the asset — which is the number that actually determines your taxable gain or loss. You are still responsible for tracking and reporting your own cost basis accurately, even if the form the broker sends doesn’t include it.
Every Transaction Is Still Reportable, Form or No Form
Even if a specific exchange or wallet doesn’t send you a 1099-DA — decentralized exchanges and non-custodial wallets are currently exempt from this reporting requirement — every taxable digital asset transaction still has to be reported on your own return. Trading one crypto for another, using crypto to buy goods or services, and selling for cash are all taxable events regardless of whether a form was issued.
Why This Raises Audit Risk
Because the IRS now receives gross proceeds data directly from major exchanges, a return that doesn’t account for crypto activity the IRS already has on file is a much easier mismatch to flag automatically than in prior years, when crypto reporting relied almost entirely on taxpayer self-reporting. If you’ve been inconsistent about reporting crypto gains in past years, 2026 is the year that catches up with the exchange-side paper trail.
What to Do Before Filing
Reconcile every 1099-DA you receive against your own transaction records, fill in cost basis where the form leaves it blank, and keep records of transfers between your own wallets and exchanges — those aren’t taxable events, but they can look like unexplained gaps if the exchange-side data doesn’t line up with what you report. If your trading activity is complex enough that this reconciliation is unclear, that’s a case for a CPA rather than software alone, the same threshold we’d apply to any of the tax-loss harvesting strategies covered elsewhere on this site.
Affiliate Disclosure: This page may contain affiliate links. If you make a purchase or sign up through these links, we may earn a commission at no extra cost to you.
Recent Comments