The crypto-tax landscape changed for real in 2026. Brokers now file Form 1099-DA on every customer, the IRS has matching software, and the days of pretending Coinbase didn't tell anyone are over. The good news: the rules themselves are simpler than the forms suggest.
This guide covers every form, every threshold, and what to do if your records are a mess.
What changed in 2026
- Form 1099-DA debuted January 2026 — covers digital asset sales on centralized exchanges. You'll receive one for any reportable activity in 2025.
- Cost basis reporting starts in 2027 — for the 2025 tax year, exchanges report gross proceeds only. You still calculate gain/loss yourself.
- The $600 broker reporting threshold is gone — replaced with universal reporting, no minimum.
How crypto taxes work
- Buying with USD: not taxable.
- Selling for USD: taxable as capital gain or loss.
- Trading one coin for another: taxable. Counts as selling the first coin.
- Spending crypto: taxable. Counts as selling.
- Receiving crypto (mining, staking, airdrops, payment for work): taxable as ordinary income at fair market value when received.
- Transferring between your own wallets: not taxable.
Forms you'll touch
- Form 8949 — every individual disposal, with date acquired, date sold, basis, proceeds, gain/loss.
- Schedule D — totals from Form 8949.
- Schedule 1 — staking rewards, mining income, airdrops as "other income."
- Schedule C — if mining or trading is a business.
- Form 1040 — the digital asset question (top of page 1) — answer yes if you had any taxable activity.
1. Centralized exchange users — easiest case
Coinbase, Kraken, Gemini, and Binance.US will issue a 1099-DA. Import directly into TurboTax, H&R Block, or any crypto tax tool. Reconcile, file, done.
The trade-off: cost basis on the 1099-DA may be wrong if you transferred coins in from elsewhere. Cross-check before filing.
2. DeFi and self-custody — moderate case
Uniswap, Aave, Compound, and similar protocols don't issue 1099s. You're the recordkeeper. Use Koinly, CoinTracker, or ZenLedger to pull on-chain history by wallet address.
The catch: liquidity provision, lending, and yield farming each have different tax treatment. Most tools handle these correctly only if you tag transactions properly.
3. NFT traders — hardest case
NFT sales are capital gains. NFT royalties are ordinary income. NFTs held for personal use (most PFP collections) might be "collectibles" taxed at up to 28% — the IRS hasn't fully clarified.
Track every mint cost, every gas fee, every transfer.
Comparison: crypto tax software in April 2026
| Tool |
Price |
Best for |
Catch |
| Koinly |
$49–$279 |
Most users, 800+ exchanges |
Pricing per tx |
| CoinTracker |
$59–$599 |
Coinbase users (native integration) |
Expensive at scale |
| ZenLedger |
$49–$399 |
Tax-loss harvesting features |
Slower DeFi support |
| TurboTax Crypto |
Bundled with TurboTax |
Simple cases |
Weaker at DeFi |
| TokenTax |
$65–$3,499+ |
Complex cases, white-glove |
Most expensive |
Common mistakes to avoid
Forgetting to report wallet-to-wallet transfers. Not taxable, but if you don't tag them in your tax software, they look like sales and you'll double-count.
Using FIFO when HIFO would save tax. Highest-in-first-out generally minimizes gains. The IRS allows specific identification if you document it.
Ignoring the digital asset question on Form 1040. Lying here is willful misrepresentation. Answer truthfully.
FAQ
What if I lost money in 2025?
Capital losses offset gains, then up to $3,000 against ordinary income. Excess carries forward indefinitely.
Do I owe tax on staking before I sell?
Yes. Staking rewards are taxable as ordinary income at fair market value when you gain dominion and control.
What about gifts and inheritances?
Gifts under $18,000 per recipient in 2025 don't trigger reporting. Inheritances get a stepped-up basis to date-of-death value.
Where to go next
For related guides see Best crypto tax software 2026, Tax-loss harvesting in 2026, and How to do taxes free in 2026.