New year, new tax form

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After several drafts and 44,000 comments, the IRS’s new 1099-DA form is here. 

Or it will be on Jan. 1, 2026, at least — but starting in 2025, brokers are going to have to keep track of some new information. 

You may remember that the term “brokers” — and how tax regulators would define them — caused quite a stir back in 2023. Earlier drafts of the 1099-DA form included a section to identify the “broker type,” but this has since been removed. 

In doing so, the IRS essentially punted this issue down the line: They know they will have to issue rules around DeFi actors eventually, but they need more time. 

Beginning in 2025, “custodial brokers” will have to report gross proceeds, and then in 2026, they will have to report cost basis for certain transactions. These actors are exchanges (think Coinbase) that act more or less like traditional equities brokers; they hold assets on behalf of clients and provide a trading platform. 

Decentralized exchanges and NFT marketplaces are not exempt, but they will probably have to rethink how they collect data in 2025 in order to meet the reporting requirements. 

For accountants working with crypto-holding clients, the 1099-DA form is going to be an adjustment, IRS officials said on a recent webinar . Taxpayers who received 1099-DA forms will have details of their transaction history for the past year, but the custodial broker may not automatically calculate and input the cost basis information. 

“When you get that 1099-DA, and it only has gross proceeds, hopefully you will know the next questions to ask your clients to be able to fill in that information,” Seth Wilks, executive director of digital asset strategy and development at the IRS, said. 

The hope is the new system will help educate taxpayers about what transactions are taxable and make compliance easier. Fingers crossed that it’s a smooth transition, but we do not envy you, CPAs.

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