Want to get some more now from Tyrone Ross Jr., 401 Financial CEO. He's joining us for this week's FA corner brought to you by Capital Group because it's tax season, so I do want to ask you about that too, because I'm sure this is very relevant for your clients. Um, there are some new rules, some new forms before the April 15th deadline that crypto investors might want to be aware of. There's a new what 1099 DA form. Um, digital, DA for digital assets. Um, talk to me about what people need to know about that.
So, there's been a, um, feeling in crypto that folks have been getting away with not paying their taxes. And starting this year, that is over. So, similar to all the other forms that you get from a brokerage, your crypto exchanges and custodians, hopefully, will be delivering you a 1099 DA, which shows your gross proceeds, folks, not cost basis. So a couple of things that you want to do. One, you want to make sure that you file an extension. Why? Because the crypto platforms and custodians may take a while to get you this form because it's the first year and not something that they're used to doing. Second thing is important, crypto custodians do not transfer cost basis like a Schwab, a fidelity, a persion. So, make sure you have all of your wallets, all of the exchanges that you interacted on. and if you are using crypto tax software, make sure that it is set up for you to get the forms that you need, can upload your 1099 DA or your 8949. We have a platform that does that at turnkey, and also make sure you are working with a CPA that understands the crypto tax landscape right now. If you've done a lot of trades, if not, it could be very, very costly. And you should also make sure that if you haven't reconciled all of these things prior, um, to sitting with a CPA, you have. So you have all of your trades, you have all of your documents, you have all of that in place, because it will be difficult for folks to track their basis. Make sure the documents and numbers add up because the government is going to have one number, you may have another. If they don't match up, trouble.
Yeah, trouble. Yes. Um, Tyrone, to be clear, if people are hodlers, so to speak, if they bought their crypto in 23 or 24 and just have been holding it, they don't need to worry about this stuff right now. It's just if you were actively trading Bitcoin or other crypto in 2025, right?
Yeah. Well said. That's exactly right.
Okay, just to make sure that people know that. Anything else here that you're that that's top of mind in this tax season when it comes to the the digital asset landscape?
Yeah, I think there there's there's a few things. One really quickly, I think this is a time now where wash sale rules and tax loss harvesting, I think folks need to learn a lot about that. That there's still some, um, lack of knowledge there amongst fiduciaries. Um, the economic substance doctrine, as we spoke about last time that I was on with you. So I think understanding that, also got to get a little bit into the cryptolese here that when you pay for your transactions with crypto, you create a new taxable lot. A lot of folks don't understand that. So if you're paying for that, um, fee with Ethereum, for instance, the gas fee, you've created a new taxable lot. Try explaining that to your CPA.
Tyrone, it's always great to catch up with you. Thank you so much.
Absolutely. Thank you for having me.
That was FA Corner brought to you by Capital.