Forbes: Cryptocurrencies face a "watershed" tax year, with significant increase in complexity for the 2026 tax season

Odaily Planet Daily reports that as 2026 approaches, crypto investors will face a tax reporting environment that is markedly different from the past. Several digital asset tax experts point out that new regulations and reporting rules will make the 2026 (covering the 2025 tax year) tax season a “high-difficulty hurdle.” Without early planning, investors may face compliance risks. The report highlights that the most significant change is the introduction of Form 1099-DA. Starting in 2025, US brokers are required to report cryptocurrency disposition information to the IRS, and this form will enter taxpayers’ view on a large scale for the first time in 2026. Since initial reporting is mainly based on “total transaction volume” and may not include cost basis, if investors fail to accurately report their costs, the system may default to “zero cost,” triggering automatic inquiries. Additionally, the tax accounting approach will shift from the previous “pooled” method to calculating costs per wallet and per account. This means assets across different exchanges and self-custody wallets can no longer be combined, and organizing and reconstructing historical transaction records will become a one-time but labor-intensive task. Users with multiple accounts and frequent DeFi participation will face even greater complexity. Forbes also summarizes other key considerations, including: multi-platform users need to consolidate various 1099-DA forms and on-chain data; qualified tax professionals with crypto experience are scarce and should be booked early; under current law, crypto assets are still not subject to stock “wash sale rules,” but related legislation could change this; de minimis tax exemptions for small payments have not yet been legislated; the tax attributes of DeFi lending and tokenized assets need to be assessed case by case; large crypto donations generally still require compliance evaluation reports. Industry insiders quoted in the report say that 2025 will be the true “watershed” for crypto tax rules, with their impact concentrated in 2026. Early record-keeping, understanding new rules, and working with tax advisors familiar with digital assets will be key for investors to avoid compliance risks. (Forbes)