Cryptocurrency Tax Reporting Expands with Broker Cost Basis Requirements

The IRS treats cryptocurrency as property, requiring every sale, trade, or spending event to be reported on Form 8949 annually.

Starting with transactions in 2025, centralised exchanges must report gross proceeds from digital asset sales directly to the IRS using new Form 1099-DA.

Mandatory cost basis reporting by brokers begins for assets acquired on or after January 1, 2026, with wallet-level tracking replacing the universal pooling method.

Cryptocurrency gains face federal tax rates from 10% to 37%, while long-term holdings exceeding one year qualify for reduced rates of 0%, 15%, or 20%.