Overview
The U.S. tax code now requires enhanced reporting on digital asset transactions through Form 1099-DA. Starting January 1, 2025, brokers must report gross proceeds for transactions; beginning January 1, 2026, they must also report cost basis for certain transactions. This change aims to increase transparency and expedite compliance. (irs.gov)
Key Changes
| Requirement | Effective Date | What’s Reported |
|---|---|---|
| Gross proceeds by brokers | Jan 1, 2025 | Total amount received from sales of digital assets |
| Cost basis on certain transactions | Jan 1, 2026 | Purchase price for gains/losses calculation |
| Real estate professionals as brokers | Transactions with closing date Jan 1, 2026 or later | Fair market value of digital assets used as payment |
| De minimis thresholds for aggregated reporting | As specified in final regs | Some stablecoin or NFT sales may be bundled if small in size |
Implications for Digital Nomads & Investors
Digital nomads who trade crypto, NFTs, or use stablecoins should be especially alert:
- Keep reliable records of purchase prices, fees, and dates. Without basis information, your gains may be overstated.
- Even without receiving a Form 1099-DA, you must report all gains or losses. The law requires a yes/no detection question on the tax return to indicate whether you hold any digital assets. (irs.gov)
Action Steps
- Collect forms: Brokers will send out Form 1099-DA for gross proceeds. Expect basis reporting for eligible transactions in or after 2026.
- Organize records: Maintain detailed documentation—dates, costs, fees—for every self-owned or third-party digital asset trade.
- Answer digital asset question accurately: Regardless of whether you receive a form, truthfully answer the digital asset ownership question on your return.
- Seek professional advice: For complex transactions (NFT-based income, real estate paid with cryptocurrency), consult a tax professional to minimize audit risk.
Example
Sasha, a remote web designer, sells graphic NFTs on an online platform. They receive Form 1099-DA showing gross proceeds from NFT sales made in 2025. In 2026, this form will additionally include basis information for many of those transactions. Sasha must report both proceeds and basis when calculating gains. If their net proceeds minus basis result in a gain, that’s taxable, even if they don’t get Form 1099-DA for every sale.
Bottom Line
Don’t wait—these reporting changes are already in effect. Proper recordkeeping, understanding gross vs basis reporting, and accurately disclosing holdings will protect you from penalties and audit issues in the new digital asset regulatory environment.