IRS has finalized regulations on broker tax reporting rules for digital assets. A 2021 law requires brokers to report the sales price, tax basis and other data on digital asset trades. The rules were scheduled to first take effect for digital assets acquired on or after Jan. 1, 2023, but IRS previously delayed the reporting obligation.
The regs address many topics: Reportable digital assets. Custodial brokers required to report. (This has been greatly narrowed and applies to platforms, such as Coinbase and Kraken, that take possession of digital assets being sold by their customers, and payment processors.) Information to be reported to IRS and the taxpayer. Computation of gain, loss and tax basis. And much more.
Brokers will use new Form 1099-DA to report gross proceeds from sales of digital assets occurring after 2024, so you won’t get a 1099-DA until early 2026. Reporting of tax basis and character of gain begins with 1099-DAs sent out in 2027.