Compliance
How Digital Asset Reporting Changes in 2026 Affect Real Estate Sales
New IRS rules require digital assets used in real estate sales to be reported on Form 1099-S—learn what this means, who’s affected, and how to stay compliant.
By NomadicTax Research Team • 5-8 min read • April 23, 2026
## 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](https://www.irs.gov/publications/p1099?utm_source=openai)) 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](https://www.irs.gov/publications/p1099?utm_source=openai))
## 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
1. **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).
2. **Consult Form 1099-S instructions** carefully when completing real estate sale reporting. Make sure to include digital asset proceeds where applicable.
3. **Coordinate with digital asset brokers** if they are involved—you’ll need cooperation to get accurate basis and gross proceeds.
4. **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](https://www.irs.gov/publications/p1099?utm_source=openai))
## 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.