Coinbase, Kraken, and every other centralized exchange in America will start reporting your crypto trades to the IRS on January 1, 2025. The agency gets those 1099-DA forms during the 2026 filing season, flipping crypto from a reporting gray zone into the same data-matching machine the IRS uses for stocks and bank accounts.
This isn't new law. The Infrastructure Investment and Jobs Act from 2021 set the framework. What's new is the IRS finally published the actual rules in July 2024, and now we're three months from enforcement. Centralized exchanges must report gross proceeds from every digital asset transaction. The rollout has a twist though: for 2025 trades, brokers only need to report what you sold for. Your cost basis, the number that actually determines profit or loss, stays optional until 2026 transactions arrive. That gap matters. In the 2026 filing season, you'll calculate your own gains while the IRS already has your sale prices on file.
What changes for your taxes
The IRS classified crypto as property back in 2014. Every swap, trade, or exchange counts as a taxable event. Nothing new there. What's different is infrastructure. Coinbase alone is preparing to issue millions of these forms, turning crypto tax reporting from a patchwork system into something resembling traditional securities oversight.
Brokers get some breathing room. The IRS promised penalty relief for good-faith reporting efforts on 2025 transactions. A February 17, 2026 deadline applies to most forms. The agency is sending reminders early next year to ensure both platforms and taxpayers know the drill.
One major loophole: decentralized exchanges are exempt. If you're trading on Uniswap or any other DEX, the IRS won't receive a 1099-DA. That doesn't erase your tax liability, though. Those trades are still taxable. You just won't have the IRS watching that particular column.
This article is informational only and should not be considered financial or tax advice. Consult a tax professional about your specific situation.
