US crypto investors are entering a new phase of tax reporting as IRS Form 1099-DA officially takes effect.
The new form creates a standard way for crypto exchanges and custodial brokers to report digital asset sales and trades, giving the IRS greater visibility while making the filing process more consistent for investors.
What Is Form 1099-DA?
Form 1099-DA, short for Digital Asset Proceeds From Broker Transactions, is the IRS’s first tax form created specifically for digital assets.
It applies to custodial brokers, including most centralized cryptocurrency exchanges and hosted wallet providers, which must submit details of customers’ eligible crypto sales and exchanges to both investors and the IRS.
For many investors, the new form replaces the different tax documents previously used for crypto transactions, making tax reporting more consistent across the industry, with CNBC calling it one of the biggest changes to US crypto tax reporting in recent years.
What It Means for Crypto Investors
The introduction of Form 1099-DA doesn’t create a new crypto tax. Instead, it changes how transactions are reported.
If you sold, exchanged, or disposed of digital assets through a participating broker, you’ll receive a Form 1099-DA summarising those transactions.
However, investors are still responsible for verifying their own records, particularly for older holdings where cost basis information may not be fully reported during the initial rollout.
The rules currently focus on custodial brokers, while previously proposed requirements for many DeFi platforms were rolled back earlier this year.
Exchanges Face Higher Reporting Standards
For crypto exchanges, the new reporting requirements bring digital assets closer to traditional financial markets, where brokers routinely submit stock transaction data to tax authorities.
Many major US exchanges have already updated their tax reporting systems ahead of the rollout, and investors may notice more detailed tax documents during future filing seasons.
The IRS says the changes are intended to improve tax compliance while giving taxpayers a standardised reporting format.
The CryptoBreakers Take: Form 1099-DA doesn’t change how crypto is taxed. It standardises how transactions are reported, making it easier for the IRS to verify taxable activity. For investors, the key is to keep accurate records rather than rely solely on exchange-issued forms.
This article is based on reporting from CNBC and guidance from the Internal Revenue Service. It is for informational purposes only and does not constitute tax or financial advice. Consult a qualified tax professional for advice specific to your situation.
Source: The IRS is getting better at spotting crypto tax mistakes
