Does Coinbase Report to the IRS? The Big January 2025 Update Explained.
Does Coinbase report to the IRS? The short answer is yes, but the details have changed in a big way. Starting January 1, 2025, Coinbase began reporting certain crypto transaction information directly to the IRS on a new tax form, Form 1099-DA. This marks the most significant shift yet in crypto tax reporting rules, and it will impact millions of U.S. crypto users.
In this guide, we’ll break down exactly what Coinbase now reports, what it means for your taxes, and how to stay compliant.
Click here for a guide on doing your Coinbase taxes with Awaken.
Why Coinbase Now Reports More to the IRS
For years, U.S. regulators have pushed to bring cryptocurrency into the same reporting framework as stocks and other traditional assets. The key turning point came in 2021 with the passage of the Infrastructure Investment and Jobs Act, which expanded the definition of “brokers” to include digital asset platforms like Coinbase.
The IRS gave exchanges time to adapt, but beginning in tax year 2025, Coinbase and other custodial exchanges are required to report crypto sales and exchanges using Form 1099-DA (Digital Asset).
This is designed to close the “tax gap” and make it harder for taxpayers to underreport or omit crypto income.
What Coinbase Reports to the IRS in 2025
1. Form 1099-DA
Starting in January 2025, Coinbase will issue Form 1099-DA both to the IRS and to customers. This form reports the gross proceeds from crypto sales and exchanges.
What is included: The total dollar amount you received when selling or swapping crypto.
What is not included (yet): Cost basis, gains, or losses. You will still need to calculate these yourself when filing 2025 taxes (due in 2026).
2. Form 1099-MISC
This form has been around since 2021 and continues in 2025. Coinbase sends a 1099-MISC if you earn more than $600 in rewards, staking, or referral bonuses. The income is reported both to you and to the IRS.
What Changes in 2026 and Beyond
The reporting requirements expand again in 2026. At that point, Coinbase will begin including cost basis information—the amount you originally paid for your crypto—on Form 1099-DA.
This will allow the IRS (and you) to see your capital gains and losses more clearly, similar to how brokerage firms report stock trades.
2025 tax year (filed in 2026) → Coinbase reports gross proceeds only.
2026 tax year (filed in 2027) → Coinbase reports both proceeds and cost basis.
What Coinbase Reported Before 2025
It’s worth clarifying what changed. Prior to January 2025:
Coinbase did not report your trades, buys, or sells to the IRS.
The only reporting was via 1099-MISC for staking, referral, or rewards income above $600.
Traders were responsible for calculating their own gains/losses and reporting on Form 8949 and Schedule D.
This left the IRS with little visibility into most crypto activity. The new 1099-DA rules change that dramatically.
What This Means for Crypto Taxpayers
1. You will receive new IRS forms
If you sold or swapped crypto in 2025, expect to receive a 1099-DA from Coinbase in early 2026. This form will also go directly to the IRS.
2. You still need to calculate gains/losses
Even with the new forms, you must track cost basis and calculate gains or losses yourself for tax year 2025. Coinbase won’t report this until 2026.
That means you still need:
Form 8949: to report each crypto sale.
Schedule D: to summarize total capital gains and losses.
3. IRS enforcement is increasing
With this new reporting, the IRS will know the dollar amounts you cashed out or swapped on Coinbase. If you don’t report those proceeds, the IRS can flag your return.
4. Rewards and staking income are always taxable
If you earned rewards or staking income, you’ll get a 1099-MISC (for $600+) and must include that income on your tax return.
Can the IRS See My Private Wallets Through Coinbase Reporting?
A frequent worry among crypto users is whether the IRS can trace their private wallets (self-custody wallets like MetaMask, Phantom, or a hardware wallet) just because Coinbase reports activity.
Here’s the reality:
Coinbase only reports what happens on its own platform. The 1099-DA and 1099-MISC forms reflect sales, swaps, or income earned through your Coinbase account.
Private wallets are not directly reported. If you hold crypto in a Ledger, Trezor, or MetaMask wallet, Coinbase does not send those balances to the IRS.
However, transfers are visible on the blockchain. If you move assets between Coinbase and a private wallet, those transactions can be matched if the IRS audits you. Blockchain analysis firms already provide these tracing services.
The tax obligation doesn’t disappear. Even if the IRS doesn’t automatically see your private wallet balances, you’re still legally required to report all taxable events (trades, sales, income) from those wallets.
In short, Coinbase’s IRS reporting does not “expose” your private wallet addresses by default, but transfers on and off the exchange are transparent on the blockchain. If audited, the IRS can connect the dots.
How to Prepare for Coinbase’s IRS Reporting
Download your transaction history: Coinbase provides a full tax report you can export, including buys, sells, swaps, and rewards.
Use crypto tax software: Tools like Awaken, CoinLedger, Koinly, or TokenTax can import Coinbase data and generate IRS-ready forms.
Work with a tax professional: If you have complex activity (DeFi, NFTs, multiple wallets), professional help is wise.
Don’t wait for the forms: Even if you don’t receive a 1099, you are still required to report all taxable crypto activity.
FAQs About Coinbase and IRS Reporting
Q: Does Coinbase report to the IRS? A: Yes. As of January 2025, Coinbase reports gross proceeds from crypto sales and exchanges to the IRS via Form 1099-DA, and reports rewards income via Form 1099-MISC.
Q: Will Coinbase report my capital gains and losses? A: Not until the 2026 tax year. In 2025, only gross proceeds are reported. You must still calculate gains and losses yourself.
Q: Do I have to report if I didn’t get a 1099? A: Yes. IRS rules require you to report all taxable crypto activity, even if you don’t receive a tax form.
Q: What happens if I don’t report my Coinbase activity? A: The IRS can assess penalties, interest, or even criminal charges for willful tax evasion. With the new reporting rules, non-reporting is much easier for them to detect.
Key Takeaways
Yes, Coinbase reports to the IRS.
January 2025 marked the start of 1099-DA reporting, which covers gross proceeds from crypto sales/exchanges.
Cost basis reporting begins in 2026, making taxes easier but leaving no room for underreporting.
Staking and rewards income have always been reported via 1099-MISC if over $600.
You are still responsible for full tax reporting, even beyond what Coinbase provides.
Final Thoughts
The IRS has made it clear: crypto is no longer an invisible corner of the financial system. With Coinbase and other exchanges now reporting directly to the IRS, tax compliance is more important than ever.
If you’re a U.S. Coinbase user, make sure you track your transactions, understand what’s reported, and use reliable tools or professionals to file correctly.
Bottom line: Coinbase does report to the IRS. Starting January 2025, the IRS will know every time you sell or swap crypto on the platform.
Related Reading
Do You Have to Report Crypto Gains Under $600?
