New year, new tax form 

The IRS’s new 1099-DA form is going to be an adjustment for accountants working with crypto-holding clients

article-image

cabania/Shutterstock modified by Blockworks

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


After several drafts and 44,000 comments, the IRS’s new 1099-DA form is here. 

Or it will be on Jan. 1, 2026, at least — but starting in 2025, brokers are going to have to keep track of some new information. 

You may remember that the term “brokers” — and how tax regulators would define them — caused quite a stir back in 2023. Earlier drafts of the 1099-DA form included a section to identify the “broker type,” but this has since been removed. 

In doing so, the IRS essentially punted this issue down the line: They know they will have to issue rules around DeFi actors eventually, but they need more time. 

Beginning in 2025, “custodial brokers” will have to report gross proceeds, and then in 2026, they will have to report cost basis for certain transactions. These actors are exchanges (think Coinbase) that act more or less like traditional equities brokers; they hold assets on behalf of clients and provide a trading platform. 

Decentralized exchanges and NFT marketplaces are not exempt, but they will probably have to rethink how they collect data in 2025 in order to meet the reporting requirements. 

For accountants working with crypto-holding clients, the 1099-DA form is going to be an adjustment, IRS officials said on a recent webinar. Taxpayers who received 1099-DA forms will have details of their transaction history for the past year, but the custodial broker may not automatically calculate and input the cost basis information. 

“When you get that 1099-DA, and it only has gross proceeds, hopefully you will know the next questions to ask your clients to be able to fill in that information,” Seth Wilks, executive director of digital asset strategy and development at the IRS, said. 

The hope is the new system will help educate taxpayers about what transactions are taxable and make compliance easier. Fingers crossed that it’s a smooth transition, but we do not envy you, CPAs.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

ETH’s “breakout marks a significant structural shift and clears the path towards…$4,000,” Kraken’s OTC desk noted

article-image

Fiscal dominance isn’t about interest rates and it isn’t about Trump, either

article-image

Firestarter Storage brings decentralized storage and delivery to Solana

article-image

After lengthy closing arguments on Wednesday, the case is now in the hands of 12 jurors

article-image

Analysts cite weak trading volume and regulatory progress as factors

article-image

Builders weigh in on Ethereum’s first decade and the decisions that will define its next one