Crypto services on the Longbridge Platform are provided by Bakkt Crypto Solutions
Are digital asset transactions reportable to the IRS?
Yes, the IRS treats virtual currency (digital assets) as property for federal tax purposes. This means general tax rules for property transactions, such as capital gains and losses, apply. As a result, you are required to report all taxable events related to your digital asset holdings and transactions on your federal income tax return.
To assist with your tax reporting, Bakkt provides a digital asset account statement called a 1099-DA’s for all customers who transacted during the tax year. This statement is typically made available by early February for the previous tax year.
As a reminder: The Longbridge Platform and Bakkt do not provide tax advice. You should consult a qualified tax professional if you have any tax-related questions.
What is Form 1099-DA?
Starting with transactions on or after January 1, 2025 (reported to the IRS and taxpayers in early 2026), digital asset brokers must issue IRS Form 1099-DA to both you and the IRS to report certain transactions.
This new form, similar to a 1099-B used for stocks, is designed to enhance tax compliance and transparency by providing detailed information on the disposition of digital assets, including:
- The gross proceeds from sales or exchanges of digital assets.
- The name and number of units of the digital asset sold.
- The date the asset was sold or disposed of.
- For transactions beginning in 2026, the cost basis (original price) may also be reported for certain assets.
This information is essential for calculating and reporting any capital gains or losses on your personal income tax return (typically using Form 8949 and Schedule D). Even if you do not receive a 1099-DA, you remain personally responsible for tracking and reporting all your taxable digital asset transactions.