The U.S. Internal Revenue Service (IRS) has published a revised version of the tax form crypto brokers and investors will use to report proceeds from certain transactions starting in 2026. The updated draft of Form 1099-DA is more streamlined and less burdensome compared to the initial version released in April.
Key Changes in the New 1099-DA Draft
- Spaces for investors to write in their wallet addresses and transaction IDs have been removed, addressing privacy concerns.
- The requirement to include the time of relevant transactions has been eliminated, with only the date now needed.
- The box asking filers to identify their broker type, such as "kiosk operator" or "hosted wallet provider," is no longer included.
"The new Form 1099-DA will help taxpayers comply with the complex world of digital assets," said IRS Office of Digital Asset Initiative Directors Raj Mukherjee and Seth Wilks in a statement. "It complements the 6045 broker regulations released recently and provides a vehicle in which taxpayers can report their in-scope digital asset gains and losses, starting in tax year 2025."
Industry Input Invited
The IRS is inviting the crypto industry to provide comments on the proposed 1099-DA within the next 30 days. This updated draft comes two months after the agency released its finalized regulations for crypto broker reporting requirements. The IRS plans to provide rules for decentralized and non-custodial brokers in a separate set of regulations later this year.
"The new Form 1099-DA is massively improved/less burdensome and requires considerably less data reporting," wrote crypto lawyer Drew Hinkes, a partner at K&L Gates, on X.
The 1099-DA will be used by crypto brokers, such as centralized exchanges like Coinbase and Kraken, to report certain crypto sale and exchange transactions to the IRS as taxable events. This is an important step in the IRS's efforts to bring more clarity and ease to the digital asset information reporting process.
