If you trade crypto—or get paid in it—2025 is different. The IRS now requires certain brokers (exchanges, some wallets and platforms) to report gross proceeds from digital asset sales on the new Form 1099-DA for transactions on or after Jan 1, 2025.
What 1099-DA does (and doesn’t) do
- Reports gross proceeds from covered digital asset sales. You’ll start seeing 1099-DA forms tied to your accounts/wallets that meet the broker definition.
- Transition relief in 2025: IRS has provided limited penalty relief for brokers while systems come online (you still must report your income correctly).
- Basis reporting: For some noncovered digital assets, brokers aren’t required to report basis until later; you still need your own basis records.
Why your records still matter
1099-DA will not capture everything (e.g., certain self-custody moves, DeFi activity). Keep a clean ledger for: transfers between wallets, token swaps/bridges, gas fees, and NFT activity—so your tax return reconciles to 1099-DA without mismatches. (Many taxpayers had notices in prior years simply because their own tracking didn’t match third-party forms.)
DeFi/NFT pain points (and fixes)
- Bridging/wrapping: Note the date, chain, and purpose; keep transaction IDs.
- Fees & rewards: Log gas, staking, airdrops, and liquidity rewards distinctly.
Multiple wallets/exchanges: Maintain a master sheet so lot selection and basis carry over when you move assets.
A tidy process for 2025
- Inventory your touchpoints: exchanges, custodial wallets, self-custody, DeFi protocols.
- Export everything quarterly (CSV/API), not just at year-end.
- Reconcile sales to 1099-DA gross proceeds; attach your own lot/basis detail.
- Document edge cases (forks, burns, lost keys) in a short memo.
How Black Inc can help
- Map your wallets/exchanges and build a wallet-level basis file.
- Reconcile 1099-DA gross proceeds to your actual gains/losses.
- Clean up prior-year gaps and create a repeatable process for next year.
Key refs: IRS final regs and 1099-DA start date; transition relief; basis rules for noncovered assets.