Crypto Taxes in 2026: The New Form 1099-DA Explained

For years, crypto tax compliance rested almost entirely on the individual. Exchanges collected fees, not reporting obligations. The IRS knew people held crypto, but automatic third-party reporting was minimal.

That changed on January 1, 2026.

What Form 1099-DA Is

Form 1099-DA is the IRS's new information reporting form for digital assets. Beginning with the 2026 tax year, centralized crypto brokers are required to report transaction data to the IRS and to send copies to their customers.

The form is modeled on the existing 1099-B used for stock and securities transactions. Just as your brokerage sends a 1099-B showing the proceeds from stock sales you made during the year, crypto brokers must now send 1099-DAs showing the gross proceeds from crypto disposals.

The rollout is phased. For 2026, brokers must report gross proceeds from sales and exchanges. Cost basis reporting - the data needed to calculate capital gains - follows in 2027. The phased approach gives brokers and users time to align historical cost basis records before full gain/loss reporting is required.

Who Counts as a Broker

The IRS has defined "broker" broadly under the new framework. Centralized cryptocurrency exchanges that serve US customers are the primary targets - platforms where users deposit assets, trade them, and withdraw proceeds.

Payment processors that facilitate crypto transactions also fall under the definition in many cases. Certain other intermediaries that facilitate disposals for compensation are included.

Decentralized protocols without a central operator are currently excluded from broker classification, though this remains an area of ongoing regulatory interpretation. Non-custodial wallets - where the user holds their own private keys - are also excluded.

For most retail crypto users who trade on centralized exchanges, the exchange will be the broker, and they will receive 1099-DAs covering their activity. Major exchanges such as Binance provide transaction history exports that integrate with most crypto tax software.

What Stays the Same

Form 1099-DA changes the reporting infrastructure. It does not change the underlying tax rules that have applied to crypto since 2014.

Every crypto-to-crypto trade is still a taxable event. Swapping Bitcoin for Ethereum, trading SOL for USDC, using crypto to purchase goods or services - all of these are still taxable disposals under US tax law. The 1099-DA will make many of these trades visible to the IRS in a way they were not before, but the taxability existed before the form.

Crypto held in personal wallets and moved on-chain between self-custodied addresses does not generate reportable events for the broker - but may still be taxable depending on the nature of the transaction.

One notable difference from stock taxation: wash sale rules currently do not apply to crypto in the US. Selling Bitcoin at a loss and rebuying it immediately is not a wash sale and the loss is deductible under current rules. This may change in future legislation, but as of 2026 it remains a meaningful difference from equity taxation.

The EU DAC8 Parallel

The US is not acting alone. The EU's DAC8 directive requires similar crypto transaction reporting from financial institutions across EU member states starting in 2026.

DAC8 applies to crypto-asset service providers regulated under MiCA. They must report transaction data - including buyer and seller identification, transaction values, and asset types - to tax authorities, which then share the information across EU jurisdictions.

For EU residents, the practical effect is similar to the US 1099-DA: exchanges will report transaction data automatically, reducing the ability to overlook gains in voluntary self-reporting. The EU framework extends to cover not just trades but also transfers between wallets where the exchange has information about the counterparty.

Practical Record-Keeping in 2026

The 1099-DA reporting covers gross proceeds. Calculating the actual taxable gain requires knowing the cost basis - what was paid for each unit of crypto being sold. The accuracy of the 1099-DA for gains calculations depends on having complete cost basis records.

For users who have traded across multiple exchanges and wallets over several years, assembling accurate cost basis data is the main practical challenge of 2026 crypto tax compliance.

Crypto tax software tools - including Koinly, CoinTracker, TaxBit, and others - are designed to aggregate transaction data from exchanges and wallets to calculate gain/loss on each disposal. For users with complex multi-year, multi-platform histories, these tools provide meaningful time savings over manual reconciliation.

For tax positions that involve significant amounts, DeFi activity, or international exchange use, a tax professional familiar with crypto is worth the cost. The IRS has increased its focus on crypto compliance, and the 1099-DA infrastructure means more automatic cross-referencing of reported data.

The infrastructure change that 1099-DA represents is significant. For users who have filed accurately under the existing rules, it primarily simplifies the paperwork. For those who have not, 2026 is a meaningful shift in enforcement capability.

This article is for educational purposes only and does not constitute financial or investment advice. Cryptocurrency trading carries substantial risk. Always do your own research.

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