The IRS has recently released a new tax form for crypto investors’ brokerage accounts, which has been significantly revised from the previous version. This new form, known as the 1099-DA, aims to simplify the process of reporting crypto transactions for tax purposes. The form is set to be implemented starting in 2026, and will be provided to investors by brokers such as centralized crypto exchanges like Coinbase and Kraken.
One of the key changes in the updated version of the 1099-DA is the removal of spaces for investors to write in their wallet addresses and transaction IDs. This addresses the privacy concerns that were raised when the initial draft of the form was introduced. Additionally, the requirement to include the time of transactions has also been eliminated, making the form more streamlined and less burdensome for investors.
The updated form no longer includes a box for filers to identify the type of broker they are, such as “kiosk operator,” “digital asset payment processor,” or “hosted wallet provider.” This simplification of the form has been praised by experts in the crypto industry, such as crypto lawyer Drew Hinkes, who described it as “massively improved” and requiring less data reporting.
The release of this new form comes after the IRS finalized regulations for crypto broker reporting requirements earlier this year. The IRS has stated that regulations for decentralized and non-custodial brokers will be provided in a separate set of rules later in the year. The goal of the new Form 1099-DA is to help taxpayers navigate the complex world of digital assets and provide clarity in reporting their gains and losses.
The IRS is seeking feedback from the public on the proposed 1099-DA form, giving stakeholders 30 days to submit comments. This feedback will be crucial in ensuring that the form meets the needs of investors and brokers in the crypto industry. Overall, the new tax form is a positive step towards simplifying the reporting process for crypto transactions and ensuring compliance with tax regulations.