Form 8949 is required for every crypto sale, trade, or disposal in 2025. The IRS now mandates wallet-by-wallet accounting and Form 1099-DA reporting. Learn what to report, how to track it, and how to avoid penalties.
1099-DA: What It Is and Why Crypto Tax Rules Are Changing in 2025
When the 1099-DA, a new IRS form designed to track cryptocurrency transactions for tax purposes. Also known as Crypto Asset Reporting Form, it replaces vague reporting rules with exact data requirements for exchanges, wallets, and DeFi platforms. This isn’t just paperwork—it’s the IRS finally catching up to how people actually use crypto today.
The IRS, the U.S. tax authority that now requires detailed reporting of all crypto activity introduced 1099-DA to close loopholes that let traders avoid taxes on airdrops, staking rewards, and DeFi swaps. Before this, you might have gotten away with not reporting a $500 airdrop from Sphynx Network or a $2,000 reward from WagyuSwap. Now, if a platform processes your transaction, they must report it directly to the IRS. The crypto tax reporting, the process of documenting every crypto transaction for income, capital gains, or loss system is no longer optional—it’s mandatory.
What does this mean for you? If you’ve ever claimed a free token from an airdrop—like APENFT, BIT, or even Kabosu Inu—you now need to track its value at the moment you received it. Staking rewards on Aleo or earning $BULL tokens from Bullieverse? Those count as income. Even swapping tokens on Core Dao Swap or FreiExchange triggers a taxable event. The IRS doesn’t care if you didn’t sell. They care if you received value. And now, platforms like Biconomy Exchange and MEXC are legally required to send that data to the government.
This change hits hard because it turns every small crypto action into a tax event. You can’t just ignore it anymore. The crypto income tax, tax owed on earnings from crypto activities like staking, airdrops, and mining rules are now clearer, but also stricter. If you held CWS from Seascape Crowns or NEVER from Neversol, you owe taxes on the dollar value when you got it—even if the token later dropped 99%. The same goes for ML from Mintlayer or OCADA from OCADA.AI. The IRS isn’t asking for guesses anymore. They’re getting exact records.
You’re not alone if this feels overwhelming. That’s why the posts below cover real cases: how people got caught missing 1099-DA reporting, how to calculate gains from zero-liquidity tokens like 1BCH.com or Elk Finance, and what to do if you never tracked your airdrops. You’ll find guides on how to prepare for IRS audits, how to handle cross-chain swaps under the new rules, and why ignoring your crypto taxes could cost you more than you made.