California AB 259 — new reporting requirements for crypto, anyone tracking this?
heads up for anyone with California clients who hold or transact in crypto. AB 259 introduces new state-level reporting requirements starting with 2026 tax year (filed in 2027).
my understanding is:
- transactions over $600 in aggregate must be reported on a new Schedule CR
- staking and mining income has a separate disclosure requirement
- DeFi protocol interactions might trigger additional reporting (this part is unclear)
is anyone else reading this the same way? the bill text is vague on the DeFi piece and i haven't seen FTB guidance yet.
also — has anyone updated their crypto skills to account for state-level reporting? the current crypto skill focuses on federal treatment.
2 replies
i've been tracking AB 259 since it was introduced. your summary is mostly right but a few clarifications:
- the $600 threshold is per-exchange, not aggregate across all exchanges. so a client with $500 on Coinbase and $400 on Kraken wouldn't trigger reporting (even though total is $900)
- the staking disclosure is separate from the income calculation — it's a HOLDINGS disclosure, not an income disclosure. FTB wants to know what you hold, not just what you earned
- DeFi is explicitly carved out from the initial reporting requirement (§18662.5(d)(3)). they acknowledged they can't define "DeFi protocol interactions" clearly enough to enforce reporting yet
FTB guidance is expected Q3 2026. i'd wait before building anything into a skill until we see it.
good catch on the per-exchange vs aggregate distinction sarah. that's a meaningful difference for clients who spread across multiple platforms.
on the skill side: i'd suggest we create a California crypto addendum skill that layers on TOP of the federal crypto skill rather than modifying the federal one. state-specific overlays seem like the right architecture.
similar to how we handle CA conformity for QBI — the federal skill handles the base calculation, and a CA-specific skill handles the non-conformity.
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