Tax Planning
Tax Planning for Digital Assets: How to Prepare for Broker Reporting in 2025
New U.S. regulations require brokers to report digital asset transactions, including gross proceeds starting January 1, 2025 — here’s how investors can stay ahead and manage compliance risks.
By NomadicTax Research Team • 5-8 min read • November 18, 2025
## What’s Changing in Broker Reporting for Digital Assets
- **Final regulations under Section 6045** require brokers who take custody or control of digital assets (trading platforms, custodial wallet providers, digital asset kiosks, etc.) to file Form 1099-DA for certain digital asset sales or exchanges beginning **January 1, 2025**, reporting *gross proceeds*. Basis reporting for some transactions must begin **January 1, 2026**. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
- Real estate transactions involving digital assets close on or after **January 1, 2026** will require fair market value reporting when digital assets are used in property purchases or sales. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
- There are identified transaction types (e.g. staking, wrapping/unwrapping, liquidity provision) for which reporting is deferred while further guidance is developed. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
## Key Tax Planning Steps to Take Now
1. **Inventory your digital asset holdings and acquisition dates**
- For assets acquired through different brokers or wallets, maintain detailed records: date, amount, cost basis, and exchange source. Basis reporting rules hinge on accurate historical records. Without them, default rules (e.g. FIFO) may apply. ([irs.gov](https://www.irs.gov/irb/2024-29_IRB?utm_source=openai))
2. **Review your brokers’ reporting capabilities**
- Understand which brokers will issue Form 1099-DA, and whether they will track basis and report it when required. Different brokers (custodial vs non-custodial) will have different obligations. ([irs.gov](https://www.irs.gov/irb/2024-29_IRB?utm_source=openai))
3. **Utilize relief periods and transitional rules strategically**
- There's penalty relief for brokers in 2025 if they make a good faith effort to comply. For backup withholding, relief extends into 2026 if taxpayer TINs are validated via the IRS TIN Matching program. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
- DeFi brokers (non-custodial, facilitating trades indirectly) have later enforcement dates (e.g. for some obligations effective 2027), with phased compliance. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
4. **Align transactional behavior with future requirements**
- If acquiring digital assets in 2025 or later, aim to keep them in wallets under same custodial or broker relationship, if possible, to simplify basis tracking for 2026 and beyond. ([irs.gov](https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets?utm_source=openai))
## Practical Example
Suppose Lisa bought 3 units of CryptoX in 2024 from WalletA and 5 units in 2025 from ExchangeB. In 2025 she sells 4 units via ExchangeB, and in 2026 another 2 units. Under the new rules:
- For the 2025 sale, broker must report gross proceeds, but not necessarily adjusted basis (unless specific conditions are met). Lisa must supply her cost basis and match transactions to their acquisition source.
- If some units were held in different custodial relationships, basis reporting becomes simpler for the units acquired in 2026 if held with one broker. FIFO or other identification methods come into play otherwise.
## Action Plan Checklist
| Task | Deadline / Timing |
|------|-------------------|
| Organize full digital asset purchase history (dates, amounts) | Before end of 2025 |
| Confirm which platforms will issue 1099-DA and their procedures | ASAP |
| Ensure each account has correct TIN and name matching IRS records | By end of 2025 |
| Plan disposition timing particularly for real estate-involved transactions | Coordinate for 2026 closings |
## Bottom Line
For digital asset investors, this is no longer just a compliance issue—it’s central to your tax planning strategy. Accurate records, smart positioning of where you hold assets, and understanding broker obligations will save you time, taxes, and exposure to penalties. With Form 1099-DA enforcement kicking in, getting organized now is essential.