The IRS has tightened crypto tax enforcement significantly in 2026. New reporting requirements mean exchanges are sending your data directly to the government. Here's what you need to know.
New for 2026
- Exchanges must issue 1099-DA forms reporting all transactions to both you and the IRS
- DeFi platforms with U.S. users must report transactions over $10,000
- Cost basis reporting is now mandatory (no more cherry-picking methods)
- NFT sales over $600 require 1099 reporting
Tax Rates
Short-term (held less than 1 year): Taxed as ordinary income (10-37% depending on bracket).
Long-term (held more than 1 year): Preferential rates of 0%, 15%, or 20%.
Common Taxable Events
Selling crypto for USD, trading one crypto for another, spending crypto on purchases, receiving staking rewards, and earning crypto income. Simply buying and holding is NOT taxable.
Use crypto tax software like CoinTracker or Koinly to aggregate transactions from all wallets and exchanges. The IRS is using blockchain analytics — they will find unreported income.
