Crypto Tax Reporting: IRS Form 1099-DA Impacts Investors and Exchanges

The IRS has implemented new regulations for crypto tax reporting, requiring custodial exchanges to report gross proceeds on digital asset sales. This change affects Form 1099-DA, which began being issued to investors in early 2026 for 2025 transactions.

Crypto tax platforms offer free tiers with limitations, including CoinTracking's seven-day trial and Koinly's support for up to 10,000 transactions without a paid plan. However, generating downloadable tax reports requires an upgrade to a paid subscription, which can range from $49 to $899 per year.

The new regulations also introduce cost basis reporting for covered securities acquired on or after January 1, 2026, with penalties reaching up to $680 per return for intentional noncompliance. Investors should begin importing their 2026 transactions into a tax platform now rather than waiting for tax season, as the first wave of 1099-DA forms has already arrived in early 2026.