The new IRS crypto tax form can flag your sale before you prove what you actually owe
The new Form 1099-DA alerts the IRS to crypto sales but often lacks basis information, requiring investors to prove their actual gains or losses.Summary
The arrival of the first Form 1099-DA season presents a challenge for US crypto investors, as many are receiving the new IRS form without understanding its implications. A survey found that 61% of users were unaware of the 2025 reporting rules, despite many believing they understood crypto tax rules. Brokers must report gross proceeds on Form 1099-DA for 2025 digital-asset sales, but basis reporting starts in 2026, meaning the initial forms may show a sale occurred without detailing the actual taxable gain or loss. Tax practitioners warn that taxpayers should not treat this document as a complete brokerage statement, as assets transferred from other wallets or bought before 2026 may result in forms missing crucial basis information. The IRS confirms taxpayers must use the 1099-DA alongside their own records to calculate basis before filing, as the form primarily signals that a transaction occurred. Furthermore, investor confusion extends beyond basis, with many misunderstanding when taxable events are triggered—the IRS treats digital assets as property, meaning sales, exchanges, or use for payment all count as disposals, contrary to the common retail trader belief that tax only applies upon cashing out.
(Source：CryptoSlate)