IRS Finalizes Rules for Crypto Tax Reporting

The US Treasury Department finalized new regulations this week designed to ensure that everyone pays the right amount of taxes when they sell cryptocurrency.

You’ve always had to pay taxes on your crypto earnings; however, the government didn’t have some rules in place for the process. Now, cryptocurrency platforms will be required to report users’ transactions to the Internal Revenue Service, a move the agency hopes will help deter tax evasion.

“We reviewed thousands of public comments and believe this new guidance addresses those concerns while striking a balance between industry implementation challenges and closing the tax gap related to digital assets,” IRS Commissioner Danny Werfel said in a statement. “These regulations are an essential part of the larger effort on high-income individual tax compliance. We need to ensure digital assets are not used to hide taxable income, and these final regulations will improve detection of noncompliance in the high-risk space of digital assets.” 

As part of the new rules, cryptocurrency platforms will also be required to provide users with 1099s at the end of the year, which should make it easier to ensure you’re reporting the right profit or loss for the year on your taxes.

The IRS released a draft version of the form, 1099-DA (Digital Asset Proceeds From Broker Transaction), last year. The agency plans to release a finalized version soon.

As part of the rules, real estate professionals are now required to report the fair market value of digital assets paid by buyers and received by sellers in real estate transactions with closing dates on or after January 1, 2026.

The new rules go into effect for transactions completed in 2025, so for this year traders will still be on their own.