Treasury and IRS Adopt Crypto Tax Reporting Rules

The Internal Revenue Service ("IRS") and the US Treasury adopted final regulations requiring custodial brokers to report certain sale and exchange transactions beginning in 2026 for transactions in 2025. (See related coverage.) 

The final regulations mandate reporting by custodial brokers, including operators of custodial digital asset trading platforms, certain digital asset-hosted wallet providers, digital asset kiosks and specific processors of digital asset payments ("PDAPs"). Real estate professionals must 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 final regulations:

• introduce an optional aggregate reporting method for certain sales of stablecoins and specific nonfungible tokens ("NFTs"), applicable only after those sales exceed de minimis thresholds. For transactions involving certain PDAPs, reporting on a transactional basis is required only if the customer's sales exceed a de minimis threshold.
• do not require taxpayers to report transaction identifications on their Form 1099-DA. However, taxpayers must collect and retain this information for seven years and make it available to the IRS upon request.
• provide rules for taxpayers to determine their basis, gain and loss from digital asset transactions. 

The regulations become effective 60 days after publication in the Federal Register.