Many Crypto Transactions will be Reported to the IRS for First Time this Year

By Evans Momodu
3 minute read


Starting in 2025, cryptocurrency investors in the U.S. will face significant changes in tax reporting requirements, making it crucial to stay informed.

These new rules aim to ensure accurate compliance and reporting for digital asset transactions, particularly through third-party brokers like Coinbase and Gemini.

For centralised crypto platforms, brokers such as custodial exchanges, wallet providers, and certain payment processors will be responsible for reporting transactions. They will provide a new form, the 1099-DA, detailing crypto purchases and sales.

The IRS will also receive a copy of this form, and it must be included in your 2025 tax return, filed in 2026. However, cost-basis information, which tracks the original purchase price of crypto assets, will not be reported until 2026, requiring investors to calculate gains and losses themselves for the time being.

For decentralised platforms like Uniswap or Sushiswap, reporting requirements will begin in 2027. These platforms will report only the gross proceeds from transactions, as they do not custody assets or track cost basis.

Investors in spot bitcoin ETFs will also see changes. These funds will issue either a 1099-B or 1099-DA, which will include taxable events such as fund-generated gains or losses.

Even though ETFs primarily hold bitcoin long-term, fund managers may sell assets to cover expenses, creating taxable events for shareholders. It’s advisable to consult a tax adviser to fully understand the implications.

To stay prepared, track all transactions now using tools like crypto tax software to maintain accurate records, including cost basis.
Source: CNN