§26 STATUTORY CONTEXT (2026 REV. PROC. 2025-32)
2026 Est: 22% ST / 15% LT + CA (13.30%)
§26 StateCryptoTax 2026 US Federal & 50-State Statutory Crypto Tax Workspace · Title 26 U.S.C.
Spot FMV Reference (IRC § 1001): BTC $81,732.46 · ETH $2,367.00 Authority: IRC §§ 1(h), 61, 165, 1091, 1222, 1411, 6045 · TD 10000 · Rev. Proc. 2024-28 · Verified 2026-11-04
Public Law 119-5 (H.J.Res. 25) · Repeal of TD 10021 · IRC § 1001

Public Law 119-5 Congressional Review Act Repeal of DeFi Broker Rules

Treasury Decision 10021 (which attempted to classify non-custodial DeFi front-end interfaces as brokers starting in 2027) was repealed under the Congressional Review Act (H.J.Res. 25 / Public Law 119-5). Non-custodial wallets (MetaMask, Phantom, Rabby, Ledger, Trezor) and decentralized protocols (Uniswap, Aave, Jupiter) do NOT issue Form 1099-DA.

§26 26 U.S.C. STATUTORY BRIEFING · CPA WORKPAPER LEDGER VERIFIED 2026-11-04 · REV. PROC. 2025-32
IRC Section
26 U.S.C. §§ 6045, 1012, 3406 · TD 10000 · Treas. Reg. § 1.6045-1
IRS Form & Line
IRS Form 1099-DA (Boxes 1a–16) → Form 8949 (Boxes A–L)
2026 Federal Rate
0% / 15% / 20% LTCG (>365d) · 10%–37% STCG (Rev. Proc. 2025-32)
3.8% NIIT Applicability
3.8% Form 8960 Surtax > $200k Single / $250k MFJ (IRC § 1411)
1099-DA Box Mapping
Box 1f Proceeds → Col (d) · Box 1g Basis → Col (e) · Box 3b/9
Statute of Limitations / Rev. Proc.
3 Yrs Standard (IRC § 6501(a)) · 6 Yrs >25% Omission · Rev. Proc. 2024-28
▸ Inspect 1200×675 CPA Statutory Workpaper Summary Card (Public Law 119-5 DeFi Broker Repeal & IRS ) WebP 1200×675
Public Law 119-5 DeFi Broker Repeal & IRS Form 1099-DA — 2026 US Statutory Crypto Tax Reference Card
Public Law 119-5 DeFi Broker Repeal & IRS Form 1099-DA — Official 2026 US Title 26 U.S.C. & Form 1099-DA Workpaper Card (2026-11-04).
📁 MY SAVED 2026 CPA TAX BINDER WORKPAPERS
    IRS Form 1099-DA Box 1a–16 Reconciliation Flow → Form 8949 (Box A/B Covered vs Box D/E Noncovered) → Schedule D & Audit Discrepancy Risk (CP2000) Statutory architecture diagram mapping IRS Form 1099-DA Boxes 1a through 16 from Custodial Brokers (TD 10000) into Form 8949 Part I/II (Boxes A/B Covered vs Boxes D/E/H/I Noncovered), Schedule D Lines 1b/2/3/8b/9/10, and IRS CP2000 Automated Underreporter audit discrepancy checks. IRS Form 1099-DA Box 1a–16 Reconciliation Flow → Form 8949 → Schedule D & CP2000 Risk Boxes 1a–16 Reconciliation Flow -> Form 8949 (Box A/B vs D/E) -> Schedule D & CP2000 Risk 1. FORM 1099-DA (TD 10000) Box 1a–1c: DTI Code & Units Box 1d–1e: Acq / Sold Dates Box 1f: Gross Proceeds ($) Box 1g: Cost Basis (Cov Only) Box 2/5: Covered vs Noncov Box 4: Backup Withholding 24% Box 11a–c: Stablecoin / NFT Box 12: Transfer-In Lot Count Box 14–16: State ID & Tax 2. FORM 8949 RECONCILIATION COVERED LOTS (Acq >= 2026) Part I Box A (ST) / II Box D (LT) 1099-DA Box 1g Basis to IRS Audit Match: Low CP2000 Risk NONCOVERED / TRANSFER LOTS Part I Box B (ST) / II Box E (LT) Box 1g Blank -> Supply Col (e) Rev. Proc. 2024-28 Wallet Ledger Omission = 100% Proceeds Taxed! 3. SCHEDULE D & CP2000 Lines 1b/2/3: Short-Term Net Lines 8b/9/10: Long-Term Net Line 21: -$3k Loss Cap (§1211) IRS AUR Matching Rule: 8949 Col (d) Total >= Sum of 1099-DA Box 1f CP2000 Audit Defense: Attach Col (f) Code 'B' or 'M' + Multi-Wallet Lot CSV Authority: IRC § 6045(g) · Treas. Reg. § 1.6045-1 (TD 10000) · Rev. Proc. 2024-28 · IRS Notice 2024-56
    Statutory Visualization: End-to-end IRS Form 1099-DA (Boxes 1a–16) reconciliation flow into Form 8949 Covered vs Noncovered checkboxes, Schedule D aggregation, and CP2000 Automated Underreporter defense.
    Critical Distinction — Information Reporting vs Substantive Taxability: Repealing TD 10021 means non-custodial wallets (MetaMask, Phantom, Ledger Live, Trezor Suite) and decentralized protocols (Uniswap, Jupiter, Raydium, Aave) will NEVER collect W-9s or issue Form 1099-DA. However, every on-chain token swap remains a taxable disposition under IRC § 1001 that you must self-report on Form 8949 Box C / Box F (or Digital Asset Box I / Box L).

    What Is vs Isn't Reported on Form 1099-DA in 2026/2027

    IRS Statutory Rule: Public Law 119 establishes the following verified 2026 benchmark values under “What Is vs Isn't Reported on Form 1099-DA in 2026/2027”: Custodial US Exchanges (Coinbase, Kraken, Robinhood, Gemini) (YES — Mandatory · Box A/B or D/E (G/H or J/K)), Non-Custodial DEXs (Uniswap, Jupiter, Raydium, Curve, Hyperliquid) (NO — Repealed by Congress · Box C or Box F (Box I or L)), Self-Custody Hardware & Software Wallets (Ledger, Trezor, Coldcard, Phantom) (NO — Exempt · Box C or Box F (Box I or L)).

    Statutory Reference Table — Public Law 119-5 DeFi Broker Repeal & IRS Form 1099-DA (2026 Tax Year)
    Venue / Transaction Type Issues Form 1099-DA? Form 8949 Checkbox Statutory Authority
    Custodial US Exchanges (Coinbase, Kraken, Robinhood, Gemini) YES — Mandatory Box A/B or D/E (G/H or J/K) TD 10000 · IRC § 6045
    Non-Custodial DEXs (Uniswap, Jupiter, Raydium, Curve, Hyperliquid) NO — Repealed by Congress Box C or Box F (Box I or L) Public Law 119-5 (CRA)
    Self-Custody Hardware & Software Wallets (Ledger, Trezor, Coldcard, Phantom) NO — Exempt Box C or Box F (Box I or L) Public Law 119-5 · Rev. Proc. 2024-28

    2026 Taxpayer Scenario Comparison Matrix (Single $75k vs Married $250k vs High-Earner $600k+)

    The statutory matrix below compares 2026 combined Federal, 3.8% Net Investment Income Tax (IRC § 1411 Form 8960), and Federal Baseline (0% State Tax) tax liabilities across three representative US taxpayer profiles:

    2026 Statutory Tax Comparison Across Single ($75k AGI), Married Filing Jointly ($250k AGI), and High-Earner ($600k+ AGI) Profiles — Public Law 119-5 DeFi Broker Repeal & IRS Form 1099-DA
    Statutory Dimension / Tax Metric Profile A: Single Filer ($75,000 Base AGI + $15,000 Crypto Gain) Profile B: Married Joint ($250,000 Base AGI + $50,000 Crypto Gain) Profile C: High-Earner ($600,000+ Base AGI + $250,000 Crypto Gain)
    2026 Federal Ordinary / Short-Term Rate (<= 365 Days) 22.00% Federal (22.00% Combined) 24.00% + 3.80% NIIT (27.80% Combined) 37.00% + 3.80% NIIT (40.80% Combined)
    2026 Federal Long-Term Capital Gains Rate (> 365 Days) 15.00% Federal (15.00% Combined) 15.00% + 3.80% NIIT (18.80% Combined) 20.00% + 3.80% NIIT (23.80% Combined)
    Estimated Tax on Short-Term vs Long-Term Disposition $3,300 (ST) vs $2,250 (LT) $13,900 (ST) vs $9,400 (LT) $102,000 (ST) vs $59,500 (LT)
    Long-Term Holding Period Tax Savings (> 1 Year) $1,050 Saved (7.00% Spread) $4,500 Saved (9.00% Spread) $42,500 Saved (17.00% Spread)
    Form 1099-DA & Form 8949 Reporting Requirement Form 8949 Box A/D (Covered) or Box B/E (Noncovered) -> Schedule D Form 8949 + Schedule D + Form 8960 (3.8% NIIT on $50k over $250k MFJ) Form 8949 + Schedule D + Form 8960 + Rev. Proc. 2024-28 Specific ID Ledger
    IRC § 6045 · TD 10000

    Form 1099-DA Deadlines

    2025 Trades: Gross proceeds (Box 1f) furnished by Feb 17, 2026.
    2026 Trades: Covered cost basis (Box 1g) mandatory starting Jan 1, 2026 (furnished Feb 16, 2027).
    REV. PROC. 2024-28

    Universal Pooling Banned

    Effective Jan 1, 2025, Treas. Reg. § 1.1012-1(j) requires isolated wallet-by-wallet cost basis tracking across every exchange and hardware wallet.
    CCA 202511015

    Pig-Butchering Loss Relief

    Profit-motivated crypto investment scams are deductible on Form 4684 Section B under IRC § 165(c)(2).

    2026 IRS Compliance Chain, Form 1099-DA Workflow & Disallowance Rules: Public Law 119

    IRS Statutory Rule: Public Law 119 is governed in the 2026 tax year by IRC §§ 1001, 1221, and 1222, IRS Notice 2014-21, Rev. Proc. 2024-28, and Rev. Proc. 2025-32, taxing short-term dispositions (≤ 365 days) at ordinary rates up to 37% and long-term gains (> 365 days) at 0%, 15%, or 20% plus the 3.8% Net Investment Income Tax (NIIT).

    1. Segregate Per-Wallet Cost Basis Pools (Rev. Proc. 2024-28): The taxpayer maintains separate FIFO or Specific-ID cost basis ledgers for each custodial broker and each self-custodied wallet address.
    2. Ingest Broker Form 1099-DA Statements: By February 15, custodial exchanges issue Form 1099-DA reporting gross proceeds (Box 1f) and covered cost basis for each digital asset sale or swap.
    3. Classify Ordinary Income vs. Capital Gains: Staking rewards, mining payouts, and airdrops are recorded on Schedule 1 / Schedule C at fair market value in USD at the exact timestamp of dominion and control.
    4. Populate IRS Form 8949 (Parts I & II): Dispositions are separated into Part I (Short-Term ≤ 365 days) and Part II (Long-Term > 365 days) using Checkboxes G, H, I (short-term) or J, K, L (long-term).
    5. Apply State Income Tax Conformity: Net capital gains flow from federal Schedule D to the taxpayer's state return (0% in AK, FL, NV, NH, SD, TN, TX, WA, WY vs. up to 13.3% in California).
    6. Answer the Form 1040 Digital Asset Question: The filer checks “Yes” or “No” on page 1 of Form 1040 and retains cryptographic transaction logs for the 3-to-6-year IRS statute of limitations (IRC § 6501).

    Statutory Myth Debunked (Restriction): A tax-free crypto-to-crypto or BTC-to-USDT stablecoin swap under IRC § 1031 like-kind exchange rules does not exist: Congress restricted IRC § 1031 exclusively to real property under the Tax Cuts and Jobs Act, making every coin-to-coin trade, DeFi liquidity swap, and stablecoin conversion an immediately taxable disposition under IRC § 1001.

    To model exact liabilities for Public Law 119, run the 2026 federal and 50-state crypto capital gains tax calculator incorporating IRS Rev. Proc. 2025-32 brackets (0%, 15%, 20%) plus 3.8% NIIT (short-term vs long-term 365-day holding threshold), verify reporting codes in our interactive IRS Form 1099-DA box-by-box reconciliation guide under Treasury Decision 10000 (89 FR 56480) gross proceeds reporting (Form 8949 Part I and Part II adjustment codes), and review wallet-by-wallet cost basis allocation under Rev. Proc. 2024-28 (mandatory per-account FIFO/Specific ID tracking from January 1, 2026).

    2026 IRS Form 1099-DA & 8949 Filing Readiness Tracker

    0 / 4 Complete

    2026 IRS Rev. Proc. & State Tax Rate Dispatch

    Title 26 Alerts

    Receive instant CPA alerts when the IRS issues new Form 1099-DA guidance, Internal Revenue Bulletins, or 50-state capital gains rate amendments—or download this page's statutory workpaper `.txt` file.

    Statutory Frequently Asked Questions & IRS Citations

    IRS Statutory Rule: Public Law 119 is governed in 2026 by IRS Rev. Proc. 2025-32 (0%/15%/20% long-term brackets plus 3.8% NIIT) and mandatory Form 1099-DA gross proceeds reporting.

    Can the IRS re-issue a DeFi broker reporting rule in the future?

    Under the Congressional Review Act (5 U.S.C. § 801(b)(2)), once a federal regulation is disapproved by joint resolution of Congress and signed into law (Public Law 119-5), the agency is legally prohibited from reissuing a rule in 'substantially the same form' unless Congress passes new legislation specifically authorizing it.

    Why is Box 1g (Cost Basis) blank on my 2026 IRS Form 1099-DA?

    Under Treasury Decision 10000 (Treas. Reg. § 1.6045-1) and IRS Notice 2024-56, digital assetlots acquired prior to January 1, 2026, or transferred in from an external self-custody wallet or another exchange, are classified as noncovered securities (Box 5 checked). Custodial brokers report gross proceeds in Box 1f to the IRS, leaving Box 1g blank so you can enter your verified historical cost basis in Form 8949 Column (e) under Box B or Box E.

    How do I prevent an IRS CP2000 Automated Underreporter notice when Form 1099-DA omits my cost basis?

    Ensure that the sum of gross proceeds reported in Column (d) across all Form 8949 sheets equals or exceeds the aggregate Box 1f proceeds reported on all Forms 1099-DA filed under your SSN/TIN. Place noncovered lots on Form 8949 Part I Box B (short-term) or Part II Box E (long-term) and enter your Rev. Proc. 2024-28 wallet-specific cost basis in Column (e).

    Does transferring Bitcoin or Ethereum between my own wallets trigger Form 1099-DA Box 1f proceeds?

    No. A non-taxable wallet-to-wallet transfer of identical digital assets owned by the same taxpayer does not trigger a sale or disposition under IRC § 1001. However, the receiving custodial broker records the inbound transfer in Form 1099-DA Box 12 (Units Transferred In), and when those units are later sold, they are reported as noncovered lots requiring external basis documentation.

    How does the $10,000 Qualified Stablecoin de minimis threshold (Box 11a) work on Form 1099-DA?

    Under Treas. Reg. § 1.6045-1(d)(10), custodial brokers may report designated qualified stablecoin dispositions (such as USDC or PYUSD) on an aggregate basis in Box 11a/11b—and are exempt from reporting if your aggregate qualified stablecoin sales at that broker do not exceed $10,000 for the calendar year.

    Are DeFi protocols, MetaMask, Ledger, and Uniswap issuing IRS Form 1099-DA for the 2026 tax year?

    No. In IRS Notice 2024-57 and subsequent congressional action under the Congressional Review Act, non-custodial DeFi front-ends and unhosted wallet software are excluded from IRC § 6045 broker reporting for 2026. You must self-report all DeFi swaps, LP positions, and bridges on Form 8949 using Box C (short-term) or Box F (long-term).