Exchanges reporting crypto gains to IRS becomes tax nightmare

It’s that time of year again in the United States. The days start to draw in, the leaves start to fall, and the tax man comes knocking for your 2025 return.

This year, thanks to the Inland Revenue Service’s new rules, the agency now knows more about Americans’ crypto trades than ever before, with brokers required to report gross proceeds from certain digital asset sales.

But unfortunately for some taxpayers, getting a form from an exchange hasn’t made filing their returns any easier.

A survey of 1,000 US crypto investors conducted in August by Awaken Tax found that 21% of respondents who had filed, or planned to file a tax extension, said they were still waiting for information they needed from an exchange or crypto platform.

A further one in five said their 1099-DA, the tax form brokers use to report certain digital asset sales, was either incomplete or they weren’t sure whether it accurately reflected their transactions.

The numbers come as taxpayers attempt to navigate the first filing season under the new reporting rules, with those who filed for an extension having until Oct. 15 to submit.

For 2025, brokers were generally required to report the proceeds (how much an asset was sold for), but not the cost basis (how much the taxpayer originally paid for it).