As cryptocurrency adoption surges into mainstream finance, the IRS has ramped up enforcement for 2025 reporting. With digital assets now firmly in the tax crosshairs, many holders face new Form 1099-DA requirements starting this year. If you’ve traded, staked, or even airdropped tokens in 2025, understanding these rules isn’t optional—it’s essential to avoid audits and penalties.
What’s New for Crypto Taxes in 2025?
The Infrastructure Investment and Jobs Act’s broker reporting rules finally kick in, meaning centralized exchanges (like Coinbase and Binance.US) must issue Form 1099-DA detailing your proceeds from sales, trades, and certain transfers. Key highlights:
• Cost Basis Tracking: Brokers report acquisition costs where available, but for wallets or DeFi, you’re still responsible. Methods like FIFO (default), LIFO, or specific identification are allowed—choose wisely and document it consistently.
• Staking and Mining Income: Rewards are taxed as ordinary income at fair market value on receipt date. New guidance clarifies that proof-of-stake rewards (e.g., ETH) trigger immediate taxation, even if not sold.
• NFTs and Airdrops: Non-fungible tokens follow capital gains rules, with sales triggering short- or long-term gains. Airdrops and forks are income at FMV, but hardship exceptions apply for unsolicited drops under $100.
• DeFi Complications: Lending interest, liquidity pool fees, and yield farming are all reportable. The IRS’s proposed regs treat many DeFi platforms as non-brokers, shifting the burden to you for self-reporting.
Penalties for non-reporting can hit $250 per form, plus interest—don’t underestimate the IRS’s data-matching capabilities.
Year-End Crypto Moves to Optimize Your Return
With just 11 days left in 2025, here’s how to clean up your portfolio:
1. Tax-Loss Harvesting: Sell losers to offset gains (up to $3,000 against ordinary income). Watch wash-sale rules—they now apply to crypto! Wait 31 days before repurchasing substantially identical assets.
2. Donate Appreciated Crypto: Gift directly to qualified charities for a deduction at FMV without triggering capital gains. Platforms like The Giving Block make this seamless.
3. Rebalance Thoughtfully: Move to long-term holds (over 1 year) for preferential rates (0-20%). Consider opportunity zones or self-directed IRAs for tax deferral.
4. Gather Records Now: Use tools like Koinly, CoinTracker, or ZenLedger to reconcile transactions. Export CSVs from all exchanges and wallets—mismatches are red flags.
Pro tip: If your gains push you into higher brackets, explore like-kind exchanges if any legacy positions qualify (though largely phased out post-2017).
Preparing for 2026 and Beyond
Expect even tighter rules, including potential wallet tracking and expanded 1099s. Start treating crypto like traditional investments: Keep meticulous records and consider a specialized tax advisor.
At Tax Guide Daily, we’re tracking these evolutions closely. Have you faced crypto reporting headaches this year? Share your experiences in the comments!
Sources: IRS Notice 2025-28; Treasury Proposed Regulations on Digital Assets. This is general information; consult a professional for your situation.
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