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U.S. crypto investors now have just over two weeks to execute any final sales before sweeping IRS reporting rules go live on January 1, 2026.

What Happened: Beginning in 2026, centralized exchanges will be required to follow the same cost-basis reporting rules as traditional brokerages.

This means platforms must report both purchase and sale cost basis details for every U.S. customer’s digital asset transaction.

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With less than a month before the new rules kick in, traders may want to evaluate whether certain sales should be completed under the 2025 system, where exchanges still do not report cost basis to the IRS, Protos reported.

The transition to mandatory cost-basis reporting is expected to complicate tax situations for investors who trade across multiple centralized and decentralized exchanges.

For instance, if someone bought one BTC at a higher price on Coinbase and another at a lower price on Kraken, then later sold one BTC on Kraken, today they could choose the higher Coinbase purchase as their cost basis to reduce taxable gains.

But starting in 2026, Kraken will be required to report its own (lower) cost basis to the IRS, potentially increasing the reported taxable gain.

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Why It Matters: For 2025 transactions, exchanges only need to file Form 1099-DA for gross proceeds, they are not required to report cost basis. Beginning with 2026 trades, cost basis reporting becomes mandatory under rules created by the 2021 Infrastructure Bill, aimed at tightening crypto tax compliance.

Until December 31, 2025, U.S. taxpayers selling Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), XRP (CRYPTO: XRP), stablecoins, or any other digital assets must continue to calculate and report their own cost basis on Form 8949.

Image: Shutterstock

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