What’s Changing in 2026 for Digital Assets & Real Estate
Starting with tax year 2026 (returns filed in 2027), any digital asset used in the sale or exchange of real estate must be reported on Form 1099-S. (irs.gov) Until now, digital assets were mostly reported under 1099-DA and 6045 broker rules, but this addition ensures that real estate transactions involving crypto aren’t overlooked. (irs.gov)
Why This Matters
- Buyers, sellers, developers dealing with real estate and digital assets (crypto, NFTs, etc.) must understand their reporting obligations. This fills a gap where transactions may have gone unreported.
- Tax professionals must adjust processes to capture digital asset basis and proceed correctly when assets are part of real property transactions.
- Tax enforcement and compliance will increase as rules expand.
Who’s Affected
- Individuals or businesses who use digital assets in exchange for real property. For example:
- Selling a house and accepting payment in Bitcoin or another cryptocurrency.
- Transferring property in return for digital tokens or an NFT.
- Real estate brokers, platforms, and others who facilitate such transactions.
What You Need to Do: Practical Steps
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Keep precise records of:
- What you received (actual digital asset type and amount).
- Fair market value at date of transaction.
- Original cost or basis of the asset transferred (for calculation of gain/loss).
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Consult Form 1099-S instructions carefully when completing real estate sale reporting. Make sure to include digital asset proceeds where applicable.
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Coordinate with digital asset brokers if they are involved—you’ll need cooperation to get accurate basis and gross proceeds.
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Watch upcoming forms: new and revised forms like 1099-DA, 1099-S, 1099-LPS, and new boxes for Trump Accounts are being rolled out. (irs.gov)
Example
Imagine Alice sells her home in 2026 and accepts 50 ETH (a digital asset) in exchange. Under the new rules:
- She must report the fair market value of those 50 ETH at the date of transfer on Form 1099-S.
- Her basis in ETH (what she paid for it) will determine gain or loss from disposal of the ETH.
- If she fails to report, she could face penalties or increased IRS scrutiny.
Stay Ahead & Avoid Pitfalls
- Consult a tax professional familiar with both crypto-taxation and real estate law.
- Use trusted valuation sources for digital assets.
- Keep all transaction data well organized—blockchain records, payment confirmations, etc.
This update underscores how US tax law is catching up with cross-asset transactions. By preparing ahead and adjusting reporting practices, taxpayers can avoid costly mistakes.