Beginning with crypto transactions in 2025 (to be filed in the 2026 tax season), crypto brokers in the United States, such as Coinbase (Nasdaq: COIN), are required to issue a new document known as Form 1099-DA .
The form will report crypto asset sales and transactions directly to the Internal Revenue Service (IRS) and the user. But this form will report gross proceeds only, not the user's original purchase price or cost basis.
Related: New IRS Form 1099-DA may trigger inflated tax payments
Capital gains taxes are calculated by subtracting an asset's cost basis from its sale proceeds. Without the basis figure in the form, the IRS sees only the gross proceeds.
The responsibility to track original cost basis prices and reconcile the transactions lies with the users.
For the first reporting year under Form 1099-DA, crypto brokers are expected to provide proceeds only. Brokers like Coinbase will begin reporting cost basis on behalf of their users beginning the next tax year. Full basis reporting is scheduled to come later in 2027, once systems and transfer-tracking standards are more standardized.
It doesn't stop there. Transactions in stablecoins and network fees, also called gas fees, also need to be reported to the IRS.
More News:
Coinbase executives warn of tax reporting complications
Coinbase's VP of tax Lawrence Zlatkin thinks the new tax rules are complicated for crypto users, CoinDesk reported .
"I just think it just does a disservice to people when you're trading 50 bucks, let's say, that you get a form like this and you have to report gains or losses. That's just not what the tax system is supposed to be about."
He not only criticized the requirement to report every small transaction but also the need to report stablecoin holdings and gas fees.
Zlatkin said the value of stablecoins is fixed and there is a chance such transactions could get overreported.
"Do you have income on USDC? No, you don't. So why are we reporting USDC transactions? And we're reporting those on our exchange as there's no blanket exemption for USDC. That, to me, clutters the system."
While he admitted that the real income on crypto should be reported, he argued that when there is no income, such as in stablecoin holdings or gas fees, the rules should exempt crypto users from reporting transactions.
Coinbase's tax reporting information director Ian Unger said that when an investor sells or moves shares between different brokers, those transactions have transfer statements and cost basis transfers. But the crypto brokers don't have such a sophisticated system yet, he highlighted.
"Until we get there, there'll be a lot of confusion," Unger said.
The introduction of Form 1099-DA indicates that the tax authorities want to treat cryptocurrencies like traditional financial instruments like equities.
Taxpayers should consult with accredited consultants before they file their taxes.
Related: New IRS proposal could literally mean less paperwork
This story was originally published by TheStreet on Mar 9, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
