Starting in 2025, cryptocurrency transactions on centralized exchanges will be subject to new IRS reporting requirements, marking a significant shift for digital asset investors.
New IRS Rules
According to a report by CNN, the Internal Revenue Service (IRS) has specified that brokers, which include custodial trading platforms, certain wallet providers, digital asset kiosks, and some payment processors, must report these transactions. The information will be captured on a new form, the 1099-DA, detailing all purchases and sales of digital assets. This form will be sent to both the taxpayer and the IRS by early 2026. Taxpayers will be required to include this information in their 2025 tax returns.
Deferral for Decentralized Platforms
For those engaging in decentralized platform transactions, the timeline is different. Peer-to-peer transactions on platforms like Uniswap and Sushiswap will not be subject to third-party reporting until 2027. These platforms will report only the gross proceeds of transactions, as they do not have access to the original purchase price necessary to calculate the cost basis.
IRS Relief Notice
The latest development comes less than a month after the IRS introduced automatic relief for centralized finance users facing new crypto tax regulations in 2025, requiring no immediate action. This relief addresses complications from Section 6045 custodial broker rules, which required CeFi brokers to report transactions using specific accounting methods.
These changes represent a major step in enhancing cryptocurrency transaction reporting and providing clarity on tax obligations for digital asset investors.
