Coinbase picks up IRS 2026 Rulebook: the truth about portfolios, fairs and taxable events (excluding interview)

Crypto tax has long been a source of confusion and with the IRS that places digital assets before and in the middle of tax forms, clarity has never been more important.

From the introduction of form 1099-da to new requirements for brokers, ETFs and ultimately Defi-platforms, the coming changes will again define how individuals and institutions navigate their crypto tax obligations.

In this interview, Lawrence Zlatkin, Vice -President of Tax on Coinbase, outlines what these changes mean, the common misconceptions that investors must avoid, and the strategies that taxpayers can help to maintain and be held liable.

What counts as a taxable event under the new rules? For example, exchanging one cryptocurrency for the other, the use of crypto for goods or services, or moving crypto between portfolios all?

The types of taxable events remain unchanged in the new tax season. So if you were paid in crypto, sold your assets, cryptocurrencies exchanged or used crypto to pay for goods and services, all of these are considered taxable events by the IRS and they must be justified for the tax season.

According to the new rules in 2026, however, Coinbase and other brokers must report your crypto-sales and exchanges to the IRS, and you use the new form 1099-DA for the tax year 2025. For 2025 transactions, your copy of the form will display both the cost basis and the gross proceeds, but Coinbase will only report.

For transactions in and after 2026, your copy will again display both cost -basis and gross yield. However, Coinbase only reports the cost basis for crypto that you have purchased via Coinbase, in addition to all gross yields.

Moving crypto between portfolios is not a taxable transaction, because you still keep it active before and after the same crypto.

Since many users have transferred assets between portfolios, trade fairs or obtained crypto well before 2025/2026, what strategies do you recommend investors to accurately reconstruct the cost base for those non-covered assets? Which records are the most important thing to retain?

Ensuring that you keep track of data about the price you have purchased that assets, regardless of which platform that purchase was created, is the key. Make sure that you also include all transaction or gas costs that have been paid as part of that purchase, because they can be included “expenditures” and are used to compensate for future taxable profits.

What safe ports or guidance exist for investors to choose their method of a cost -based allocation

Coinbase customers can manage their cost -basis method in their tax centers institutions within the platform. From there they can currently choose between a Hifo (highest in, first), Lifo (last in, first from) and FIFO (first in, first) method. We always urge customers to ensure that they consult a tax professional before they choose a strategy.

Many investors have Bitcoin ETFs or Ethereum ETFs. How are these ETFs dealt with differently under the new IRS reporting regulations in 2026? What requirements will ETF investors have and what should investors in these ETFs now do to prepare for accurate tax reports of their ETF wins or losses?

Most ETFs will be treated as trusts or ‘looking through’ entities for the investor. It is as if you have held the BTC or have yourself. The ETF or the custodian for the ETF must report your sale as if you have exchanged or sold the crypto activum yourself. ETFs are useful for owning crypto assets, but they will not change how you are burdened.

Defi platforms are treated differently. Could you go through us what exactly Defi brokers should report – and what they will not do – as soon as the rules come into force in 2027? Also, which transition reliefs and timing do Defi users and Defi front-end providers must now be aware?

In the absence of reporting from Defi providers, it is important for Defi users to maintain their personal documentation of all transactions to make tax reports less headache until 2027. Defi transactions cannot be reported to the IRS, but they are subject to the same tax rules as CEFI transactions and you must report your transactions, profit and losses to the IRS, just as you would do with CEFI.

Those affected in Defi must also be wary that transactions on centralized exchanges are not the only taxable transactions. Personal wallet transactions and Defi activities can also be subject to taxes.

Which legal strategies underestimate investors, in addition to just compliance.

I encourage each individual investor to consult a qualified tax professional for their specific circumstances and what is good for them, but there are different strategies that are often overlooked. With harvesting tax losses you can compensate for profit by selling under -performing assets, while choosing the right cost -basis method can help reduce taxable profits. These both require strong archives, but can do some heavy lifting when reducing tax accounts.

There are many misconceptions floating in the crypto community about how taxes works. What are some of the most common myths or rumors you hear about crypto taxes, and can you explain why they are wrong and what the realities are?

A great misconception is that many think that crypto is treated by the IRS as a currency when it actually treats crypto as ownership. Returning to one of your earlier questions, this means that selling, exchanging or even the use of crypto to buy goods can activate taxable events.

Another misconception is that you do not have to pay tax on crypto transactions if they are not reported to the IRS. Not true. Reporting helps you to calculate your taxes and it helps to find the IRS taxpayers who do not report their income. But you are only responsible for your taxes and reporting is just a guide or tool to help.