Binance or white-label crypto exchange solutions—which is better for startups in 2026?

Reporting Bitcoin gains accurately to the IRS when using multiple exchanges requires meticulous record-keeping and reconciliation. As of 2026, the IRS has standardized reporting through new forms, but the responsibility for tracking "cost basis" across different platforms still largely falls on you.

1. Collect All Tax Forms

For the 2025 tax year (filed in 2026), centralized exchanges acting as "brokers" are required to issue Form 1099-DA (Digital Asset Information Return).

• Form 1099-DA: You will receive one from each centralized exchange (e.g., Coinbase, Kraken, Binance.US) where you sold or exchanged assets. These report gross proceeds to the IRS.

• Form 1099-MISC: You may also receive this if you earned more than $600 in ordinary income from activities like staking or airdrops on a specific platform.

2. Consolidate and Reconcile Data

The biggest challenge with multiple exchanges is tracking your cost basis—the original amount you paid for the Bitcoin.

• Cost Basis Gaps: While brokers must report proceeds for 2025, many are not required to report cost basis until 2026 transactions. If you bought Bitcoin on Exchange A and moved it to Exchange B before selling, Exchange B may report the sale but will not know what you originally paid on Exchange A.

• Transfer Matching: Transfers between your own wallets or exchanges are not taxable events. However, you must reconcile these movements to ensure you don't accidentally report a transfer as a sale.

• Wallet-Level Tracking: Starting in 2026, the IRS expects cost basis records to be maintained on a per-wallet or per-account basis, rather than as one combined universal pool.

3. Calculate Gains and Losses

Once your data is consolidated, determine the gain or loss for every taxable event (selling for fiat, swapping for another token, or spending).

• Holding Period: Assets held for one year or less are short-term and taxed at ordinary income rates (10–37%). Assets held for more than a year are long-term and eligible for lower capital gains rates (0%, 15%, or 20%).

• Inventory Methods: Use methods like FIFO (First-In, First-Out) or Specific Identification to determine which specific "lot" of Bitcoin you sold.

4. Complete IRS Forms

• Form 8949: List every individual transaction, including the date acquired, date sold, proceeds, and cost basis.

• Schedule D: Transfer the totals from Form 8949 to this schedule to report your overall capital gains or losses.

• Form 1040: You must answer "Yes" to the digital asset question on your main return if you had any taxable crypto activity.

5. Use Crypto Tax Software

Because reconciling multiple 1099-DA forms and off-chain transfers is complex, using crypto tax software (like CoinLedger or Koinly) is highly recommended. These tools connect to your exchanges via API or CSV files to automatically aggregate your full history and generate a defensible tax report.