How the IRS treats crypto
In the U.S., the IRS treats digital assets as property, not currency. Selling, swapping one coin for another, or spending crypto can each be a taxable event, with gain or loss measured against your cost basis. Rewards from staking or mining are generally taxed as income when you receive them.
New reporting: Form 1099-DA
Brokers, including centralized exchanges, now report digital asset sales to the IRS on Form 1099-DA. Gross proceeds reporting began with 2025 transactions, and cost basis reporting is phasing in for assets acquired from 2026. If your records don't match what's reported, expect questions, so clean bookkeeping matters more than ever.
Beyond taxes
- Custody: Who holds the keys, and what happens if they're lost?
- Allocation: What percentage of your net worth belongs in a volatile asset class?
- Estate: Without a plan, crypto can be lost forever when the owner dies.
A crypto-native professional can help with all three.
Frequently asked questions
Is swapping one crypto for another taxable?
Generally yes. A crypto-to-crypto trade is treated as selling one asset and buying another, which can create a capital gain or loss.
What is Form 1099-DA?
A new IRS form brokers use to report digital asset sales. Proceeds reporting started with 2025 transactions, and cost basis reporting phases in after that.
How do I pass crypto to my heirs?
Combine legal documents (will or trust) with a secure, documented way for a trusted person to access keys or accounts. Specialists can help set this up.