The IRS will require crypto transaction reporting on centralized exchanges in 2025 and for P2P platforms in 2027.
Crypto Reporting for CEX Transactions in 2025
Starting in 2025, the IRS will require centralized exchanges like Coinbase and Gemini to report cryptocurrency transactions using Form 1099-DA. This is part of the IRS's efforts to decrease tax filing errors and remind digital asset holders of their tax liabilities.
P2P Transactions Reporting Begins in 2027
IRS reporting for P2P transactions on decentralized platforms like Uniswap will start in 2027. The reporting will cover only the total transaction amount and won't include the cost basis information, as decentralized platforms cannot track the purchase price.
Implications for Investors and Tax Obligations
Investors using centralized exchanges to carry out transactions can be assured that transaction data will be filed with the IRS. However, reporting of cost basis information will only be mandatory starting in 2026. This change may complicate the calculation of taxable gains for investors.
The new IRS crypto reporting rules will increase transaction transparency and remind investors of their tax obligations.