Digital asset owners and brokers preparing for the 2025 filing season must contend with new information reporting obligations, expanded disclosure requirements and potential modifications to the tax characterization and treatment of certain digital asset transactions. Most significantly, digital asset owners must implement a per-wallet or per-account cost-basis tracking method for digital assets and incorporate into their tax returns any Forms 1099-DA furnished by brokers. Additionally, digital asset brokers must file the Form 1099-DA with the IRS and furnish a corresponding statement to the customer reporting the gross proceeds from digital asset sales effected for that customer on or after January 1, 2025.

This Tax Alert details the requirements digital asset owners and brokers must satisfy when reporting digital asset transactions for tax year 2025 and beyond. It also examines the steps these parties will need to take to comply with these requirements.

These topics will also be discussed in an EY Webcast on December 5, 2025: Navigating digital asset tax rules: tax year 2025 and the road ahead. The link is available here.

2025 requirements

Cost basis reporting

Effective January 1, 2025, taxpayers must track digital assets on a per-wallet or per-account basis tracking, as required by the final regulations on digital asset reporting by brokers (TD 10000). Accordingly, the "universal" method of pooling cost basis for a given asset type across all accounts is effectively eliminated. Taxpayers must also apply cost basis methods (e.g., FIFO, or Specific ID) separately to the assets within each individual wallet or account. A one-time safe harbor in Revenue Procedure 2024-28, allows taxpayers to reallocate any unused basis among their existing digital asset holdings as of January 1, 2025 (see Tax Alert 2024-1385 for more details).

EY observes: The new basis tracking rules complicate recordkeeping for multi-wallet users with historical data gaps, but the safe harbor offers an opportunity for taxpayers to establish a granular basis record that aligns with the new per-wallet mandate. The implications of the per-wallet basis-tracking mandate differ depending on whether the digital assets are held in a custodial or self-hosted wallet, primarily due to the new broker reporting requirements. For self-hosted wallets, the taxpayer bears the responsibility of manually tracking and calculating cost basis on a per-wallet basis, without the benefit (or potential complication) of brokers reporting cost basis, which will be available for custodial wallets and accounts starting in tax year 2026.

Broker reporting

Under the final regulations on digital asset reporting, brokers must file and furnish the new Forms 1099-DA for applicable digital asset transactions occurring on or after January 1, 2025. Brokers do not include DeFi protocols, smart contract-based liquidity pools and non-custodial platforms. Additional guidance on who is considered a broker can be found in frequently asked questions (FAQS) released on October 30, 2025.

For tax year 2025, Form 1099-DA must include gross proceeds but not cost basis, which will be required for sales beginning in 2026. The deadline for furnishing Forms 1099-DA (postmarked if sent by mail or sent electronically) to customers for the 2025 tax year is February 17, 2026. The forms must be e-filed with the IRS by March 31, 2026. Transitional relief applies for brokers for backup withholding, and penalty relief applies for sales effected for certain customers that have not been previously classified by the broker as US persons (see Tax Alert 2025-1267).

EY observes: Market participants newly classified as brokers for 2025 will need to have the systems and capabilities to identify customers, track digital asset transactions, determine proceeds and (eventually) cost basis, and furnish Form 1099-DA statements to both taxpayers and the IRS beginning with the 2025 tax year. For taxpayers receiving a Form 1099-DA for tax year 2025, reconciling Forms 1099-DA with their own records becomes important to make sure their records match those of the IRS.

Exemption from withholding

US digital assets brokers may claim an exemption from reporting by completing the new certification section on the draft revised Form W-9, Request for Taxpayer Identification Number and Certification (see Tax Alert 2025-1980), assuming the draft is adopted. The proposed version date is January 2026.

EY observes: The introduction of a new certification section means brokers will need to update their onboarding and vendor-management processes to capture this new certification. They will also need to coordinate updates to their Form W-9 collection systems and monitor for final instructions once the revised form is released, as errors or omissions could delay compliance readiness for the 2025 reporting cycle.

Stablecoins

Despite enactment of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (see EY Briefing) and Treasury's indication of forthcoming related tax guidance, taxpayers must still calculate and report tax gain or loss on each sale, exchange or disposition involving stablecoins and report those transactions on Form 8949 of their 2025 tax return. The calculations should be completed before April 15, 2026, the tax return filing deadline for corporations and individual taxpayers. Brokers generally are expected to elect into an alternative reporting regime for stablecoins under which they report "designated sales" of "qualifying stablecoins" on Form 1099-DA on an aggregate basis if the aggregate exceeds $10,000 annually. Nondesignated sales (i.e., exchanges of qualifying stablecoins for digital assets that are not qualifying stablecoins) are not reportable under this election.

Corporate alternative minimum tax (CAMT)

Corporations that are subject to the CAMT and have returns due on April 15, 2025 can elect to exclude unrealized gains/losses on digital assets from their Adjusted Financial Statement Income (AFSI) for purposes of calculating the CAMT, per interim guidance released by the IRS on September 30, 2025 in Notices 2025-46 and 2025-49 (see Tax Alert 2025-2143).

EY observes: This should alleviate concerns among some taxpayers that taxable income could be otherwise be inflated by unrealized appreciation of digital asset assets held on the balance sheet.

Staking and trust tax classification

Certain US digital asset exchange-traded products can now engage in staking without jeopardizing their tax status, provided they meet certain conditions. Under Revenue Procedure 2025-31, a safe harbor allows certain US exchange-traded products that hold digital assets and are investment and grantor trusts for federal income tax purposes to stake their digital assets without being reclassified as a business entity, which would trigger entity-level tax. A limited transition period gives existing trusts time to amend their trust agreements and authorize staking at any time during the nine-month period beginning from November 10, 2025. (A Tax Alert on Revenue Procedure 2025-31 is forthcoming.)

EY observes: Trusts engaging in staking should promptly review their governing documents and operating structures to determine whether amendments are needed to qualify under the safe harbor. Taxpayers should also watch for further guidance on related issues, including timing of income recognition and information-reporting obligations associated with staking rewards.

Implications

Taken together, the new guidance and requirements for tax year 2025 signal a meaningful shift from policy exploration to concrete implementation. Accordingly, taxpayers may need to assess and, where necessary, update existing systems, data collection processes, documentation practices, and governance procedures relating to digital asset activities to prepare for the 2025 filing season and monitor future legislative and regulatory changes.