How the PARITY Act would affect digital asset tax reporting requirements - Thomson Reuters tax
The PARITY Act proposes to simplify digital asset tax reporting by requiring brokers to report gross proceeds and cost basis on a new Form 1099-DA, with specific rules for DeFi and staking. It also clarifies wash sale rules and safe harbor provisions.
Aforeworn detected this change in the Crypto & DeFi Tax Reporting space on July 6, 2026 and published this briefing so affected operators are forewarned rather than caught off guard. It is rated High urgency. Crypto exchanges/brokers, DeFi protocols, accounting firms, high-volume traders should confirm how it applies to their specific situation before acting. There is a time constraint attached: Proposed effective date: tax years beginning after December 31, 2025. However, early preparation is advised as the bill may pass with retroactive or earlier effective dates.. Acting after that point can mean penalties, a lapsed licence, or lost eligibility — exactly the kind of surprise Aforeworn exists to prevent. Aforeworn monitors Crypto & DeFi Tax Reporting continuously and turns every detected change into a plain-English briefing like this one, so you always know first. Forewarned is forearmed.
What changed
New reporting requirements under the PARITY Act: brokers must file Form 1099-DA for digital asset transactions, including gross proceeds and cost basis. DeFi protocols may be treated as brokers. Wash sale rules apply to digital assets. Staking rewards are taxable upon receipt. Safe harbor for certain reporting errors.
Who it affects
Crypto exchanges/brokers, DeFi protocols, accounting firms, high-volume traders
What you must do
Review current reporting processes to align with proposed Form 1099-DA requirements; update systems to capture cost basis and gross proceeds; assess if DeFi activities trigger broker status; prepare for wash sale rule application.
Deadline
Proposed effective date: tax years beginning after December 31, 2025. However, early preparation is advised as the bill may pass with retroactive or earlier effective dates.
Never miss a change like this again
Aforeworn watches Crypto & DeFi Tax Reporting around the clock and alerts you the moment a rule moves — with a plain-English brief on what to do.
Start your free trialRelated changes in Crypto & DeFi Tax Reporting
- Newsroom | Internal Revenue Service
- South Africa releases draft crypto tax guide - Digital Watch Observatory
- EU watchdog EBA details big crypto fines as landmark laws bite - TradingView
- Strict Digital Asset Regulation: Zimbabwe Tightens Oversight on Cryptocurrency Market - صوت الإمارات
- Illinois’ new crypto tax puts users under a burden stocks do not face - CryptoRank