Crypto Exchange Tax Reporting (1099 Forms) for 2025: What You Need to Know
Jan, 11 2026
Starting January 1, 2025, if you traded crypto on any U.S.-based exchange like Coinbase, Kraken, or Binance.US, you’ll get a new tax form: 1099-DA. This isn’t just another paperwork update-it’s the biggest change to crypto tax reporting since the IRS first started treating Bitcoin as property back in 2014. For the first time, crypto brokers will be legally required to report your sales, trades, and exchanges in a standardized way. But here’s the catch: you still need to do your own homework. The form won’t fix everything, and if you’re using multiple platforms or decentralized exchanges, you’re not off the hook.
What Is the 1099-DA Form?
The IRS created Form 1099-DA under the Infrastructure Investment and Jobs Act of 2021. It’s meant to bring crypto reporting in line with how stocks and bonds have been tracked for years using Form 1099-B. Before 2025, exchanges gave out different forms-or none at all. Some sent 1099-B, others used 1099-MISC for staking rewards, and many just sent a PDF with incomplete data. Now, every broker serving U.S. customers must use the same form, same fields, same deadlines.
For the 2025 tax year (filing in April 2026), exchanges will report only your gross proceeds-the total dollar value of everything you sold or exchanged. That includes selling Bitcoin for USD, swapping Ethereum for Solana, or trading an NFT for USDT. But they won’t tell you your cost basis yet. That changes in 2026. For now, you’re on your own to track how much you paid for each asset.
Who Gets a 1099-DA?
If you’re a U.S. taxpayer and you used a platform that qualifies as a “digital asset broker,” you’ll get one. That means:
- Centralized exchanges like Coinbase, Kraken, Binance.US, and Gemini
- Payment processors that handle crypto transactions for merchants
- Hosted wallet providers that facilitate trades on your behalf
But if you traded on Uniswap, PancakeSwap, or any decentralized exchange (DEX), you won’t get a 1099-DA. Same goes for peer-to-peer trades on LocalBitcoins or Paxful. These platforms aren’t considered brokers under the law. The IRS estimates that about 15-20% of all crypto activity happens outside broker platforms-and that’s still your responsibility to report.
Even if you only traded once and made $50, you’ll get the form if your total volume hit $10,000 in a year. There’s no de minimis exception for small trades anymore. The IRS is tracking everything.
What’s Actually on the Form?
The 1099-DA isn’t just a summary. It breaks down every qualifying transaction with:
- Date and time of each sale or exchange
- Type of transaction (sell, trade, transfer out)
- Asset name (BTC, ETH, etc.)
- Gross proceeds in USD at the time of the transaction
- Broker’s name, address, and EIN
For NFTs, you’ll get two separate 1099-DA forms: one for the first sale of an NFT (like minting and selling your own artwork), and another for all other NFT trades (buying and reselling someone else’s). That’s new. And it’s complicated.
Here’s what’s not on the form: your original purchase price, your holding period, or your realized gain. That’s your job. If you bought 0.5 BTC for $15,000 in 2021 and sold it for $30,000 in 2025, the form will show $30,000 in proceeds. But you need to remember that $15,000 cost basis to calculate your $15,000 gain.
Why This Matters for Your Taxes
Before 2025, the IRS had no reliable way to match your tax return with your crypto activity. Now, they’ll have a direct feed from your exchange. If you report $10,000 in gains but your 1099-DA says $50,000, the IRS will notice. And they’re already using data-matching software to flag mismatches.
Deloitte predicts a 25-30% spike in crypto-related tax amendments in 2026 as people realize their self-reported numbers don’t match the broker’s. One user on Reddit spent 20 hours last year reconciling five different exchange reports with three different formats. That’s not rare. It’s normal.
And penalties aren’t theoretical. In 2024, the IRS issued $1.2 million in penalties to one taxpayer who used Kraken and Coinbase but didn’t report a $12,000 trade because he thought “it was just a swap.” The IRS doesn’t care if you thought it was tax-free. It’s a taxable event.
What You Should Do Now
Don’t wait for the form to arrive in February 2026. Start organizing now.
- Collect all your transaction histories from every exchange and wallet you used in 2025. Download CSVs or PDFs. Don’t rely on auto-import tools-those can miss things.
- Identify your cost basis for every asset you sold or traded. Use the FIFO method (first in, first out) if you’re unsure. The IRS accepts it as the default.
- Use crypto tax software like Koinly, CoinTracker, or ZenLedger. They auto-import from exchanges and calculate gains. Most cost $50-$150 for the year. Way cheaper than an accountant’s hourly rate.
- Don’t ignore NFTs. Selling an NFT is a taxable event. Buying one with crypto is too-you’re disposing of crypto to acquire it.
- Keep records for seven years. The IRS can audit crypto returns for up to six years if they suspect underreporting.
If you used multiple exchanges, you’ll get multiple 1099-DA forms. That’s normal. You’ll need to combine them into one Form 8949 and Schedule D on your 1040. Tax software handles this automatically. Doing it manually? You’re signing up for hours of frustration.
What’s Coming in 2026 and Beyond
Next year, exchanges will start reporting cost basis. That’s huge. It means they’ll tell you what you paid for each coin you sold. But even then, it won’t be perfect. If you moved coins between wallets or used a hardware wallet, the exchange won’t know your original purchase price. You’ll still need to track that yourself.
By 2027, the IRS plans to integrate crypto data directly into Form 1040. You’ll see a dedicated section for digital assets, just like dividends or capital gains from stocks. That’s the end goal: make crypto taxes as straightforward as filing your W-2.
But don’t get complacent. The IRS is still chasing unreported income. They estimate $50 billion in crypto gains go unreported every year. That’s why they’ve issued John Doe summonses to exchanges, demanding user data. They’re not bluffing.
When to Hire a Pro
If you’re a casual trader with one exchange and simple transactions, tax software is enough. But if you’ve done:
- Multiple trades across 3+ platforms
- Staking, lending, or yield farming
- NFTs, DeFi swaps, or tokenized assets
- Gifts, airdrops, or hard forks
Then hire a CPA who specializes in crypto. The National Society of Accountants says crypto returns take 3.2 extra hours per client on average. That’s $150-$300 extra in fees. But it’s cheaper than an audit.
Professional crypto tax prep averages $350-$600. Traditional investment returns? $220-$350. The gap is real. And it’s growing.
Bottom Line
The 1099-DA is a step forward, not a magic fix. It makes reporting easier for people who use one exchange and keep good records. But if you’re spread across platforms, traded on DEXs, or dabbled in DeFi, you’re still doing the heavy lifting. The IRS isn’t asking for permission anymore-they’re watching. And they’ve got the tools to catch you.
Start organizing your 2025 trades now. Download your data. Use software. Don’t guess your cost basis. And don’t assume the form will do it all for you. The system’s getting smarter. You should be too.
kris serafin
January 12, 2026 AT 14:02Just got my 1099-DA draft from Coinbase 🚨 and holy smokes, it’s insane how detailed it is. They even tracked my ETH → SOL swap from March 14th at 3:07 AM. I thought I was safe since it was a ‘trade’ and not a ‘sale’… Nope. 😅
Pro tip: Use Koinly. It auto-imports from 30+ exchanges and even flags your DEX transactions. Saved me 18 hours. I’d rather spend that time gaming.
Michael Richardson
January 12, 2026 AT 14:35So now the government knows when you bought your Dogecoin and how much you paid for it. Great. Next they’ll track your TikTok likes.
Gideon Kavali
January 12, 2026 AT 23:44Let me get this straight-Americans are being forced to hand over their entire crypto history to the IRS, while China bans crypto outright and Russia uses it to bypass sanctions? This isn’t regulation-it’s surrender. We’re turning into a nation of tax accountants with wallets.
And don’t even get me started on the DEX loophole. The IRS wants us to report peer-to-peer trades but won’t even require exchanges to verify identities? That’s not oversight-it’s hypocrisy.
They call this ‘transparency.’ I call it tyranny with a W-2.
Ritu Singh
January 13, 2026 AT 00:49They say this is about fairness but really it’s about control. The state doesn’t care if you made money-it cares that you can’t hide from it. Crypto was supposed to be freedom… now you get a spreadsheet from your broker and a subpoena if you forget to file
I’ve been trading since 2017 and never paid taxes on my early BTC gains… I wonder if they’ll come for me in 2030 when I’m retired
Who’s to say the IRS won’t start taxing your NFT profile picture next year? I mean… it’s an asset now right? Or is it just art if you’re rich?
They’ll tax your dreams next
And what about when you lose money? Do you get a refund? No. You just get audited
They don’t want you to profit-they want you to be afraid
I’m moving my coins to a cold wallet and never touching a US exchange again
They’re not fixing tax evasion-they’re killing innovation
And they wonder why people are leaving the country
It’s not about money anymore
It’s about autonomy
And we just gave it away
With a checkbox
And a form
Sabbra Ziro
January 14, 2026 AT 13:52Hey everyone-just wanted to say, if you’re feeling overwhelmed by this, you’re not alone. I’ve been there. I used to panic every time I made a trade.
But I started using CoinTracker last year and it literally walked me through every step. Even helped me categorize my staking rewards correctly.
And if you’re using DEXs? Just export your wallet history as a CSV and drag it in. It’s not perfect, but it’s way better than Excel sheets with scribbles.
You’ve got this. And you don’t have to do it alone.
Kip Metcalf
January 15, 2026 AT 00:33Just download your stuff. Use software. Done. Stop overthinking it. The IRS isn’t coming for your meme coins. They’re coming for the big players. You’re fine.
Frank Heili
January 15, 2026 AT 03:51For those confused about cost basis: FIFO is fine for most people. If you bought 1 BTC at $10K, then another at $30K, and sold 0.5 BTC later, you’re selling the first 0.5 at $10K cost basis. Simple.
But if you’re doing DeFi, NFTs, or cross-chain swaps? Use Koinly. It handles L2s, bridging, and wrapped tokens better than any human.
Also-don’t ignore gas fees. They’re deductible as transaction costs. Most people forget that.
And yes, buying an NFT with ETH? That’s a taxable disposal of ETH. Same as selling it.
It’s weird. But it’s the law.