If you sold or exchanged digital assets in 2025, your broker is now reporting those transactions to the IRS on a new form — Form 1099-DA — and must send you a copy by February 17, 2026. For most people this is the first year the IRS receives that information directly.
The important part is what the form is missing.
What changed, and when
Broker reporting is being phased in over two years:
- Brokers report gross proceeds for transactions effected on or after January 1, 2025.
- Brokers report basis on certain transactions effected on or after January 1, 2026.
Read those two dates together and the gap is obvious. For the 2025 tax year, most 1099-DA statements will show what you sold something for and not what you paid for it. Your cost basis is the number that decides whether you had a gain or a loss, and for this filing season the IRS says taxpayers will generally have to calculate it themselves.
Who is covered, and who is not
The final regulations apply to brokers that take possession of the digital assets being sold — custodial trading platforms, certain hosted wallet providers, digital asset kiosks, and certain processors of digital asset payments.
Two consequences worth planning around:
- For 2025, the filing requirements generally apply to U.S. brokers. If you transacted through an exchange based outside the United States, you may receive no Form 1099-DA at all.
- You report regardless. Every taxpayer must report related income, gains or losses whether or not a Form 1099-DA arrives. A missing form is not a missing obligation.
There is also transitional relief on the broker's side: for 2025 transactions reported in 2026, the IRS will not impose penalties on brokers who make a good faith effort to file and furnish the forms correctly and on time. That relief is for brokers. It says nothing about your return, and it is a reason to expect some statements to be incomplete or wrong.
How crypto is taxed, in one paragraph
The IRS treats digital assets as property. That means selling or exchanging them produces a capital gain or loss, calculated as proceeds minus basis, and the holding period decides the rate — more than one year is long-term, one year or less is short-term and taxed at ordinary rates. The mechanics are the same ones that apply to any other property, which we cover in our guide to investment taxes.
Not everything taxable is a sale
Selling is the obvious event. Two others catch people who never sold anything for dollars:
- Exchanging one digital asset for another is a disposal. You have realised gain or loss on what you gave up, even though no cash moved.
- Receiving new digital assets from mining or staking is a taxable event that produces ordinary income, not capital gain. The amount you recognise is the fair market value in U.S. dollars at the time you received it, and it is reported on Schedule 1 of Form 1040. That value then becomes your basis if you later sell.
There is also a question you cannot skip. Everyone who files a Form 1040, 1040-SR, 1040-NR, 1041, 1065, 1120 or 1120-S must check either "Yes" or "No" to the digital asset question — it is answered by every filer, not only by people who transacted. Leaving it blank is not an option, and answering it carelessly on a return you signed is a bad place to be casual.
What to do before February
- Export your full transaction history now, from every platform you used, including ones you no longer use. Exchanges close, restrict accounts and lose historical data, and your basis records are the one thing nobody else is holding for you.
- Reconcile transfers between your own wallets. A transfer is not a sale, but it can appear in records as a disposal if the trail is broken.
- Expect to reconstruct basis for older holdings, particularly anything bought before you used a custodial platform.
- Compare the 1099-DA against your own records when it arrives. If it disagrees with what you know happened, that difference is worth resolving before filing, not after a notice.
If the IRS has already written to you
Because the IRS now receives this information directly, mismatches between a broker's report and a filed return will surface more often than they used to. A notice proposing changes based on gross proceeds — with no basis subtracted — can propose a tax far larger than what you actually owe, precisely because the basis was never reported.
That is a correctable situation, but it is corrected with records and a response, not by ignoring it. An Enrolled Agent or a CPA can deal with the agency on your behalf through representation before the IRS.
The dates and rules above come from IRS guidance current as of July 2026. This is general information and not advice about your transactions.
Bring your exports before the statements arrive
The work in a crypto return is basis reconstruction, and it takes longer than the rest of the return combined. Send us your transaction history now rather than in April, and we will have the basis worked out by the time your Form 1099-DA lands. Start with personal tax preparation, or call +1 (954) 724-1114.