New Digital Asset Tax Rules: What Flower City Tax Wants You to Know in 2026

As tax season continues in Rochester, NY, more taxpayers are encountering new reporting requirements related to digital assets. Whether you’ve invested in cryptocurrency, traded NFTs, or used digital currencies for transactions, it’s important to understand how these activities impact your 2025 tax return. At Flower City Tax, we help individuals navigate these updates with clarity so there are no surprises when it’s time to file. Digital asset reporting is no longer optional—it’s a required part of filing accurately.

What Are Digital Assets?

Digital assets are defined as electronically stored value that can be traded or transferred. This includes cryptocurrencies like Bitcoin, stablecoins, and nonfungible tokens (NFTs). These assets are treated as property for tax purposes, which means transactions involving them may result in taxable gains or losses. Even if you’re not actively trading, certain activities involving digital assets can still create reporting requirements.

What Is Form 1099-DA?

For the 2025 tax year, some taxpayers will receive a new Form 1099-DA if they bought, sold, or exchanged digital assets through a broker. Brokers are required to send this form to both the taxpayer and the IRS by February 17, 2026. It’s important to note that many of these forms may not include cost basis information. This means you may need to calculate your original purchase price and determine your gain or loss independently. Accurate recordkeeping is essential.

Do You Still Need to Report Without a Form?

Yes. Every taxpayer must report digital asset activity, regardless of whether they receive a Form 1099-DA. This includes income, gains, or losses from selling, trading, or using digital assets. Additionally, all taxpayers must answer the digital asset question on their tax return with a “yes” or “no.” This applies even if no transactions occurred during the year. It’s a required step that should not be overlooked.

Key Takeaways for 2025 Tax Filing

Digital assets include cryptocurrencies, stablecoins, and NFTs
Form 1099-DA may be issued for transactions through brokers
Cost basis may not be included and must be calculated manually
All digital asset activity must be reported, even without a form
Every taxpayer must answer the digital asset question on their return

Understanding these points helps ensure compliance and reduces the risk of errors.

Get Guidance You Can Trust

Digital asset tax rules are evolving, and staying compliant can feel complex without the right support. At Flower City Tax, we work with individuals throughout Rochester, NY to accurately report digital asset activity and maximize their tax outcomes. If you have questions about cryptocurrency, NFTs, or your upcoming return, our team is here to help. Contact Flower City Tax today to schedule your appointment and file with confidence. We can be reached at our Rochester, NY office by calling 585-663-8210 or by emailing us through our secure form.

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