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The IRS has released a draft of the 2025 Form 1099-DA, which will be used to report digital asset transactions by brokers, aligning with proposed regulations issued last year. Taxpayers who engage in digital asset transactions during the tax year will generally need to include Form 1099-DA on their federal income tax returns. Digital assets to be reported include cryptocurrencies, stablecoins, and non-fungible tokens. The form requires details such as the type and amounts of digital assets transacted, parties involved, acquisition and disposition dates, cost basis, and information on wash sale transactions.

The form’s comprehensive requirements include information about the type and amount of digital assets transacted, as well as detailed information about the parties involved. Taxpayers are expected to report when they acquired the asset when it was sold or disposed of and cost basis. There is also a query about nondeductible losses in wash sale transactions involving digital assets that are also stock or securities, even though the wash sale rule does not currently apply to digital assets. This level of detail ensures that taxpayers and brokers are fully aware of what is expected in terms of reporting digital asset transactions.

Moreover, the draft instructions mention concerns raised by tax professionals regarding potential challenges in implementing the new reporting requirements. For example, brokers may face difficulties determining non-deductible losses due to a “reportable change in control or capital structure” and guiding such events. Overall, the draft Form 1099-DA and instructions provide insight into the IRS’s efforts and aim to clarify reporting obligations for digital asset transactions. However, areas of uncertainty and potential challenges still need to be addressed before finalization.