Starting with the 2025 tax year, the IRS is officially turning on a new spotlight for digital assets: Form 1099-DA. If you use centralized exchanges, hosted wallets, or payment processors to buy, sell, or spend crypto, you can expect this new form to land in your inbox in early 2026—along with a lot more attention on your Form 1099-DA crypto taxes 2025.
For business owners who already juggle payroll, sales tax, and entity filings, this is one more layer of reporting you can’t afford to ignore. The goal of this guide is simple: show you what will be reported, what won’t, and the smart moves to make now so you are prepared instead of surprised.
Form 1099-DA is the IRS information return used by digital asset brokers to report your taxable crypto activity. Beginning with calendar year 2025, qualifying platforms must issue a 1099-DA to you and to the IRS when you sell, exchange, or otherwise dispose of covered digital assets.
The IRS defines digital assets broadly to include:
The purpose of Form 1099-DA is to close the gap between what taxpayers self-report and what the IRS can independently verify, very similar to how Form 1099-B works for stock trades. You can read the official IRS overview here: About Form 1099-DA.
The new rules apply primarily to custodial brokers—platforms that hold your keys and take possession of your digital assets while you trade. These typically include:
Real estate professionals who help buyers pay for property with crypto are also pulled into this regime, but their 1099-DA reporting begins a year later, starting with the 2026 tax year.
Form 1099-DA focuses on taxable events. If a transaction would normally be a taxable sale or exchange, expect it to show up on the form when it happens through a custodial platform.
Typical reported events include:
Everyday retail purchases through certain processors are subject to reporting only after crossing specific thresholds. But from a tax standpoint, every sale or exchange is still potentially taxable, even if it doesn’t hit a reporting threshold or trigger a 1099-DA.
For the 2025 tax year, custodial brokers are required to report gross proceeds—the total amount you receive when you sell or exchange a digital asset, before fees and before considering what you originally paid.
Expect your 2025 Form 1099-DA to include, at a minimum:
Starting with transactions in 2026, brokers will also begin reporting your cost basis for covered digital assets. That means the IRS will be able to match your reported gains and losses against both what you sold and what the broker shows you originally paid.
Imagine Sam buys 1.5 BTC in 2024 for a total of $61,500, including fees, and later sells the full 1.5 BTC in 2025 for $92,000 on a centralized exchange.
When basis reporting becomes mandatory for covered digital assets, the exchange will also report Sam’s $61,500 cost basis, giving the IRS a clearer picture of the gain or loss.
Many crypto investors own multiple lots of the same token purchased at different times and prices. The question then becomes: which units are you considered to have sold first?
The IRS rules work in two layers:
On top of that, you can no longer treat all of your wallets and exchanges as one big pool. Basis must now be tracked wallet by wallet and account by account. If you move assets between accounts, you have to allocate your existing basis reasonably to the specific wallet or exchange.
If you have a history of active trading across multiple platforms, this is where specialized crypto tracking software and professional help become critical.
The final IRS rules for custodial reporting do not currently cover decentralized finance (DeFi) platforms or unhosted wallets where no intermediary takes custody of your assets. Certain proposed DeFi reporting rules were withdrawn, and for now there is no Form 1099-DA coming from purely non-custodial protocols.
That does not mean DeFi activity is tax-free. It simply means the IRS may not receive a matching 1099-DA from a protocol. You are still required to track and report all taxable DeFi income, swaps, and disposals on your return.
If you’ve already experienced how painful things can get when recordkeeping fails, take a look at our case study on retirement accounts and digital assets: Crypto Scam Tax Consequences: $740K Self-Directed IRA Loss.
If you are a business owner using crypto in your entity—whether to receive payments, invest excess cash, or pay contractors—Form 1099-DA adds a new layer of visibility. The IRS will now see gross proceeds from your digital asset sales in much the same way they see stock sales reported on Form 1099-B.
That visibility can cut both ways:
Even if 1099-DA only reports gross proceeds at first, the IRS is steadily building an information trail that will make “missing” crypto trades increasingly risky.
Here are practical steps you can take now to prepare for 1099-DA and strengthen your overall tax position:
If your crypto activity is limited to a few trades on one exchange, you may be able to reconcile 1099-DA data on your own. But once you layer in multiple wallets, DeFi positions, entities, and retirement accounts, it pays to have a coordinated plan.
At My CPA Pro, we help business owners integrate crypto into a broader tax and wealth strategy—so Form 1099-DA becomes one more data point, not a source of panic.
Want to make sure your 2025 Form 1099-DA lines up with a smart tax plan? Schedule a Free Tax Strategy Session and we’ll walk through your situation, your entities, and your crypto activity so you can move forward with clarity and confidence.