The truth about wallets, exchanges and taxable events (exclusive interview)

Cryptographic taxes have long been a source of confusion, and with the IRS placing digital assets in front and the center in fiscal forms, clarity has never been more important.

From the introduction of form 1099-DA to the new requirements for runners, ETF and, finally, the Defi platforms, the next changes will redefine how people and institutions navigate their cryptographic fiscal obligations.

In this interview, Lawrence Zlatkin, Vice President of Coinbase Taxes, describes what these changes mean, common erroneous concepts should avoid investors and strategies that can help taxpayers to stay complying while minimizing responsibility.

What counts as an taxable event under the new rules? For example, are you exchanging a cryptocurrency for another, using cryptography for goods or services, or moving crypto to the wallets treated in the same way?

The types of taxable events remain unchanged in the new tax season. Then, if he was paid in Crypt, he sold his assets, exchanged cryptocurrencies or used cryptography to pay goods and services, all these are considered taxable events by the IRS and must count the tax season.

However, according to the new rules in 2026, Coinbase and other corridors must inform their sales and exchanges of encryption to the IRS, and you use the new 1099-DA form for fiscal year 2025. For transactions of 2025, your copy of the form will show the cost of costs and gross income, but coinbase will only report gross income to the IRS.

For transactions in and after 2026, your copy will show the cost base and gross income. However, Coinbase will only report the cost basis for the cryptography that he bought through Coinbase, along with all gross income.

Moving cryptography between wallets is not an taxable transaction, since it still has the same cryptographic asset before and after.

Since many users have transferred assets between wallets, exchanges or acquired Crypto long before 2025/2026, what strategies do you recommend so that investors accurately reconstruct the cost base for those non -covered assets? What records are most important to preserve now?

Ensure that you keep records of the price that bought those assets, regardless of the platform that originated, is key. Be sure to also include all transaction or gas rates that were paid as part of that purchase, since these “expenses” can be included based on and used to compensate for future tax gains.

What safe ports or guidance exist for investors to choose their cost allocation method?

Coinbase customers can administer their cost -based method in their tax center configuration within the platform. From there, they can currently choose from a Hifo method (higher in, first outside), Lifo (last in, first outside) and Fifo (first in, first outside). We always urge customers to make sure they consult a tax professional before choosing a strategy.

Many investors have a Bitcoin ETF or ETFS Ethereum spot. According to the new IRS report regulations that will arrive in 2026, how are these ETF treated differently? What requirements will ETF investors have and what should investors do in these ETFs now to prepare for precise tax reports of their ETF earnings or losses?

Most ETFs will be treated as trusts or entities to “look through” for the investor. It is as if I had the BTC or eth yourself. The ETF or the custodian of the ETF should inform your sales as if you had exchanged or sold the cryptographic asset yourself. ETFs are convenient to have cryptographic assets, but they will not change the way it is imposed.

Defi platforms will be treated differently. Could you guide us through what the runners defi will need to inform, and what they will not do, once the rules enter into force in 2027? In addition, what reliefs and transition time should they meet defi users and Front-End Defi suppliers now?

In the absence of Defi suppliers reports, it is important that defi users maintain their personal documentation of all transactions to make tax reports less than a headache until 2027 wheels. Defi transactions may not be reported to IRS, but are subject to the same fiscal rules as CEFI transactions, and must inform their transactions, profits and losses to the IRS as it would with CEFI.

Those who do in Defi must also be careful that transactions in centralized exchanges are not the only taxable transactions. Personal wallet transactions and Defi activities may also be subject to taxes.

Beyond simply compliance, what legal strategies often underestimate investors that can help minimize the tax responsibility of cryptographic under these new rules?

I encourage each individual investor to consult a qualified fiscal professional for their specific circumstances and what is correct for them, but there are several strategies that are often overlooked. Tax loss collection allows you to compensate for profits by selling low performance assets, while choosing the correct cost base method can help reduce taxable profits. Both require strong record maintenance, but they can do heavy job in reducing tax invoices.

There are many erroneous concepts that float in the cryptographic community on how taxes works. What are some of the most common myths or rumors that you hear about cryptographic taxes, and you can explain why they are wrong and what are the realities?

A great erroneous idea is that many think that IRS treats cryptography as a currency, when cryptography really treats property. Returning to one of your previous questions, this means that selling, exchanging or even using Crypto to buy products can trigger taxable events.

Another mistake is that you do not have to pay taxes on cryptographic transactions if IRS are not reported. It isn’t true. The reports helps him calculate his taxes, and helps IRS to find taxpayers who do not report their income. But only you are responsible for your taxes, and the reports are just a guide or tool to help.