XRP holders face a rapidly approaching deadline as digital asset tax reporting rules are set to take effect in the coming months. Crypto analyst and commentator BULLRUNNERS warned that there are only 118 days left in the 2026 tax year before brokers begin reporting cost basis data for specific digital asset transactions, marking a significant shift in US tax obligations for cryptocurrency investors.
New tax reporting requirements
In a recent video shared on X, BULLRUNNERS highlighted changes impacting XRP investors, focusing on the role of IRS Form 1099-DA and new Treasury Department rules. Under current procedures, brokers have been reporting only the proceeds from digital asset sales. Starting in the 2026 tax year, brokers must begin reporting the original purchase cost, or cost basis, for covered digital asset transactions.
BULLRUNNERS explained that many investors previously overlooked the importance of tracking purchase costs across different platforms. He advised XRP holders to review all the places they have stored their tokens, including exchanges, hardware wallets, and other digital accounts, since these locations play a vital role under the latest IRS rules.
A broker can now be required to report both the proceeds from a sale and the original cost for covered digital assets, but may leave the cost blank if insufficient documentation exists.
Covered vs. non-covered transactions
BULLRUNNERS pointed to an emerging distinction between “covered” and “non-covered” digital asset transactions under the IRS framework. He stated that XRP acquired and held with the same broker during 2026 qualifies as covered, which means the broker will submit both sales proceeds and cost basis information to the IRS.
However, XRP acquired before 2026, or assets transferred between different exchanges or wallets, fall into the non-covered category. In such instances, brokers may only report the sale proceeds, leaving the original purchase cost unknown for tax purposes.
“The IRS does not assume that you paid a fair price. The IRS does not assume anything,” BULLRUNNERS commented, underscoring the need for accurate record-keeping.
Tracking cost basis across accounts
BULLRUNNERS discussed Revenue Procedure 2024-28, which clarifies how digital asset records must be maintained, and urged XRP holders to abandon the idea of treating their holdings as one unified pool. Instead, cost basis now needs to be tracked separately for each account or wallet location.
He explained that holders with assets distributed across multiple platforms must maintain documentation showing exact units, acquisition dates, and original costs for every location. This change complicates the process for those who frequently move XRP between wallets and exchanges.
Mini dictionary: Form 1099-DA, a new IRS form introduced for reporting sales of digital assets, including proceeds and, in some cases, cost basis, which helps determine tax liabilities.
Documenting transactions and consulting professionals
BULLRUNNERS also referenced safe-harbor provisions, which allow for more flexible allocation of cost basis across platforms as of January 1, 2025. However, he cautioned that these rules do not apply evenly to all types of digital assets. For example, while stablecoin transactions above $10,000 and certain NFT transactions over $600 have specific thresholds, there is no similar exemption for XRP.
He emphasized the link between digital asset activity and taxpayer identity, noting that Form 1099-DA will associate blockchain wallet addresses with personal information submitted to regulated brokers.
BULLRUNNERS strongly recommended that XRP holders document every position before the end of the current tax year and consult a qualified tax advisor for guidance. He concluded by referencing key resources such as Treasury Decision 10000, Revenue Procedure 2024-28, IRS Form 1099-DA instructions, and official IRS tax tips.
