2 Major Coming in 2026: IRS Updates Explained

Are you holding Bitcoin, Ethereum, or other digital assets? Get ready for big updates. The IRS is making crypto taxes clearer but stricter. Starting with the 2025 tax year, you’ll file under these new rules in 2026. These changes aim to track your crypto trades just like stocks.

A Quick Look at Crypto Tax History

Crypto started with no taxes. Early traders bought and sold without worry. But in 2014, the IRS changed that. They called all cryptocurrencies “property.” This means every sale, trade, or spend is a taxable event. You owe capital gains tax on profits.

By 2019, things got tougher. The IRS added a yes/no question about crypto on Form 1040. They started audits. Big exchanges like Coinbase began sending 1099 forms. Now, two new rules kick in for 2026 filings.

First Change: The New 1099-DA Form

From 2025, all “crypto brokers” must send you Form 1099-DA. This includes centralized exchanges like Coinbase and some decentralized ones. The form reports:

• Your cost basis (what you paid for the asset)
• Sale dates and prices
• Trades between cryptos
• Any disposals

This data helps calculate your capital gains or losses. It’s like the 1099-B for stocks. No more guessing your buy price. The IRS gets a copy too, so matching your return is key.

Why it matters: Casual traders might hate the paperwork. It ends easy tax tricks. But for long-term holders, it’s great. Clear records build trust with banks and regulators. This could pull in more big investors.

Second Change: Track Cost Basis by Wallet and Exchange

Now, you can’t mix everything. If you buy Bitcoin on Coinbase and Robinhood, treat them separate. Each platform’s buys have their own cost basis.

Before, many lumped all Bitcoin together. Pick one average price. Not anymore. The 1099-DA helps, but you must track across wallets too. Use FIFO (first in, first out) or specific ID methods per IRS rules.

Example:

1. Buy 1 BTC on Coinbase for $50,000.
2. Buy 1 BTC on Robinhood for $60,000.
3. Sell 1 BTC for $70,000.
4. If from Coinbase: $20,000 gain. From Robinhood: $10,000 gain.

This adds work. But software like CoinTracker or ZenLedger can help. Export data from each platform.

How These Affect You

Pros:

• Standard rules like stocks make crypto mainstream.
• Better records mean fewer audit risks.
• Attracts institutions who hate uncertainty.

Cons:

• More tracking for multi-platform users.
• DeFi and NFTs get complicated. Wallets like MetaMask may need manual reports.
• Short-term traders face higher compliance costs.

These rules show crypto is here to stay. No more “wild west.” The IRS sees it as real money.

How to Prepare for 2026 Crypto Taxes

Don’t wait. Start now:

1. Track everything: Note buy dates, prices, fees per wallet.
2. Use tools: Apps connect to exchanges for auto-reports.
3. Choose methods: Decide FIFO or specific ID early. Stick to it.
4. Save records: Keep CSVs, screenshots for 3-7 years.
5. Check brokers: Confirm they send 1099-DA.

For DeFi users: Staking, lending? Those are income too. Report fairly.

Smart Alternatives: Crypto ETFs

Hate the hassle? Try ETFs. Spot Bitcoin and Ethereum ETFs trade like stocks. No wallets needed. Your broker sends standard 1099-B. Gains flow to your stock account.

Examples: BlackRock’s IBIT, Fidelity’s FBTC. Easy for retirement accounts too. Get crypto exposure without tax headaches.

What’s Next for Crypto Taxes?

2026 is just the start. Expect more. Congress may add wash sale rules (no tax loss on quick buys back). Global rules like EU’s MiCA align too.

Stay informed. These changes legitimize crypto. Prices may rise as adoption grows.

FAQ: <2 Cryptocurrency Tax Rule Changes> in 2026

Q: Who gets 1099-DA?
A: Users with $600+ in trades from brokers.

Q: What if I use only wallets?
A: Self-report. No form, but IRS expects accuracy.

Q: Are NFTs and DeFi covered?
A: Yes, as digital assets. Track sales and income.

Q: Can I avoid taxes?
A: No legal way. HODL long-term for lower rates.

Final Thoughts

The <2 Cryptocurrency Tax Rule Changes> in 2026 bring clarity and compliance. They might feel strict, but they protect investors and grow the market. Update your habits now. Use ETFs if direct holding is too much. Crypto’s future is bright—with taxes included.

Questions? Drop a comment below.

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Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.