Crypto Tax
Form 1099-DA Explained: A 2026 Crypto Tax Guide
Published June 20, 2026 · 9 min read
If a Form 1099-DA showed up from your exchange this year, you're not imagining it — and you're not in trouble. Form 1099-DA is a brand-new IRS information return for digital asset sales, and the 2026 filing season is the first time it has gone out at scale. The short version: it tells the IRS how much you sold your crypto for, but it often doesn't say what you originally paid for it. That missing cost-basis number is the single biggest source of confusion — and overpaid tax — this season. Here's exactly what's on the form, who sends it, why a box might be blank, and what to do before you file.
The Short Answer
Form 1099-DA — "Digital Asset Proceeds From Broker Transactions" — is the crypto equivalent of the Form 1099-B stockbrokers send every January. Here's what matters most, before the details:
- →It comes from custodial platforms: centralized exchanges, hosted wallets, and crypto ATMs — not from DeFi protocols or your own wallet.
- →It first applies to sales made on or after January 1, 2025. Forms covering those sales are being furnished to taxpayers in early 2026 — this filing season.
- →For now, it reports gross proceeds (what you sold for). Cost basis (what you paid) is frequently blank or marked "noncovered."
- →You cannot simply copy the numbers from your 1099-DA onto your return without checking them — you need to reconcile the form against your own records first.
What Is Form 1099-DA?
Form 1099-DA was created by the Infrastructure Investment and Jobs Act, signed into law in November 2021 , which added digital assets to the broker information-reporting rules under Internal Revenue Code Section 6045. The Treasury and IRS finalized the implementing regulations in July 2024 , and the form itself works much like the Form 1099-B you'd get from a stock brokerage: it tells you, and the IRS, that a sale happened, what the platform recorded as proceeds, and — when available — what it recorded as your cost basis.
The goal is straightforward: close the gap between how much crypto income gets reported voluntarily and how much the IRS can independently verify. Before Form 1099-DA, the IRS had limited visibility into individual crypto sales unless an exchange voluntarily reported them, and many used forms like 1099-K or 1099-MISC that were never built for this purpose. Form 1099-DA gives the IRS a purpose-built form and, for the first time, a systematic way to cross-check what taxpayers report against what brokers report.
Who Sends You a 1099-DA — and Who Doesn't
You'll generally receive a Form 1099-DA from custodial cryptocurrency exchanges (such as Coinbase, Binance.US, or Kraken), hosted or custodial wallet providers, digital asset kiosks and Bitcoin ATMs, and processors of digital asset payments once your sales exceed the $600 annual reporting threshold .
You will not receive a 1099-DA from decentralized exchanges, DeFi protocols, or your own self-custody wallet. On April 10, 2025 , legislation overturning the IRS's "DeFi Broker Rule" was signed into law, using the Congressional Review Act to repeal the regulation before it ever took effect. That means front-end DeFi interfaces and non-custodial wallets are not required to collect your information or issue you a form.
This is an important distinction, not a loophole. Swaps, trades, and disposals through DeFi protocols are still fully taxable. The repeal only removed the reporting obligation from the platform's side. You're still required to track and report that activity yourself on Form 8949 — it just won't show up pre-filled anywhere.
What's Actually on the Form
A Form 1099-DA generally identifies the digital asset sold, the date you acquired it, the date you sold it, the gross proceeds from the sale, and — when the broker has it — your cost basis . It also indicates whether the asset is "covered" or "noncovered" for basis-reporting purposes, a distinction that matters a great deal for the 2025 and 2026 tax years, covered in detail below.
What trips people up most is the proceeds figure: it's gross, not net. It's simply units sold multiplied by sale price, before subtracting what you paid to acquire those units. Your actual taxable gain is proceeds minus basis minus any allowable transaction costs — and the form may only be handing you the first of those three numbers.
The $0 Cost-Basis Trap
Here's the scenario that catches the most people off guard.
Say you bought 1 BTC for $20,000 on a private, self-custody wallet. Later, you transferred that same BTC to Coinbase and sold it there for $60,000. Coinbase will issue a Form 1099-DA reporting $60,000 in gross proceeds — because that's the sale it actually witnessed. It has no idea you paid $20,000 for that BTC two wallets and one transfer ago, so the cost-basis box comes back blank.
If you file using only the number on the form, the IRS's matching system may treat your basis as $0 — making it look like you made $60,000 in pure profit, not $40,000. That's the difference between paying tax on $40,000 and paying tax on $60,000, for doing nothing wrong except leaving in a number the broker never had.
Your real, defensible position is $20,000 of basis and a $40,000 taxable gain. You establish that by pulling your original purchase record — an exchange statement or wallet transaction log from when you bought the BTC — and reporting that basis yourself on Form 8949 next to the broker's proceeds figure.
[[AUTHOR NOTE — replace with your real take, e.g. what surprised you about the basis gap, or reconciling a 1099-DA against your own exchange records]]
2025 vs 2026: Gross Proceeds Now, Cost Basis Later
The basis gap isn't permanent — it's a phased rollout, and understanding the timeline tells you what to expect each filing season.
2025 transactions
Forms furnished early 2026 — this season
Brokers report gross proceeds only. Cost-basis reporting isn't yet mandatory, so many boxes will be blank or marked "noncovered." The IRS has signaled transition relief, declining to penalize brokers making a good-faith effort to file accurately .
2026 transactions
Forms furnished in 2027
Brokers must report gross proceeds and cost basis — but only for assets classified as "covered."
"Covered" means the asset was acquired on or after January 1, 2026 , and held continuously at the same broker from purchase through sale. "Noncovered" means it was acquired before that date, or transferred in from a different wallet or exchange at any point — the new broker simply never had visibility into your original purchase, so it isn't required to report a basis figure, though some brokers may choose to do so voluntarily.
Practically, this means anyone who moves assets between wallets or exchanges — which describes most active crypto users — should expect to keep seeing blank or noncovered basis fields well past this season, and should plan to self-track basis as an ongoing habit rather than a one-time fix.
Wallet-by-Wallet Basis and the Rev. Proc. 2024-28 Safe Harbor
Cost-basis tracking got stricter for everyone starting January 1, 2025, not just because of Form 1099-DA, but because of Rev. Proc. 2024-28. Before this rule, many taxpayers used a "universal" method, pooling cost basis across every wallet and exchange they used. The IRS eliminated that option.
Now, basis must be tracked wallet-by-wallet, or account-by-account: each wallet or exchange is treated as its own ledger, with specific-identification or FIFO ordering applied only to the units actually held there. Rev. Proc. 2024-28 included a one-time safe harbor letting taxpayers reasonably reallocate their existing pooled basis across wallets before the rule took effect — but that allocation, once made, is binding going forward . If you've never separated your basis by wallet, this is the underlying reason your 1099-DA cost-basis boxes look messy — it isn't just brokers being slow to adopt the new form, it's a genuine accounting transition that affects every active crypto holder.
What to Do When You Receive Your 1099-DA
Don't file directly from the form
Treat the gross-proceeds figure as a starting point, not your taxable gain.
Gather your own acquisition records
Purchase confirmations, wallet transaction history, or exchange exports for every unit sold.
Match each disposal to its real basis
Especially for assets transferred in from another wallet or exchange.
Make any specific-ID election before the sale
Absent that, FIFO typically applies by default within an account.
Report on Form 8949, then Schedule D
Use your reconciled basis — not a blank or zero figure.
Once you've identified your actual proceeds and basis for each sale, estimate your actual gain with our free crypto tax calculator before you file — it's a faster way to sanity-check the numbers than working through them by hand.
Frequently Asked Questions
❓ When will I receive my Form 1099-DA?
Brokers furnish 1099-DA forms covering 2025 sales in early 2026, generally around the same time as other 1099 forms. If you sold digital assets through a custodial exchange or hosted wallet last year, check your account's tax documents section.
❓ Why is the cost basis blank on my 1099-DA?
For 2025 transactions, brokers are only required to report gross proceeds; cost-basis reporting becomes mandatory for covered assets acquired starting in 2026. It may also be blank because the asset was transferred in from another wallet or exchange that your current broker never saw you purchase from.
❓ Do I get a 1099-DA for DeFi trades or self-custody wallets?
No. After the April 2025 repeal of the IRS's DeFi Broker Rule, decentralized exchanges and non-custodial wallets are not required to issue 1099-DA forms. That activity is still taxable — you just have to track and report it yourself.
❓ What if my 1099-DA has wrong or missing information?
Contact the broker first to request a corrected form if the proceeds figure looks wrong. For a missing or blank cost basis, you generally don't need a correction — you simply report your own substantiated basis on Form 8949 alongside the broker's proceeds.
❓ Does a 1099-DA mean the IRS already knows my exact gains?
Not necessarily. The IRS knows your gross proceeds from covered sales. It typically does not know your cost basis unless the broker reported one, so it doesn't automatically know your real gain — though it can flag a mismatch if your reported gain looks inconsistent with the proceeds figure.
❓ Do I still need to report a 1099-DA if I sold at a loss?
Yes. Every disposal reported on a 1099-DA needs to appear on your Form 8949, whether it resulted in a gain or a loss. Reporting losses correctly is also how you offset gains elsewhere in your portfolio.
Sources
This article is for educational purposes only and is not tax advice. Crypto tax rules are complex and change frequently — consult a qualified CPA or tax professional about your specific situation before filing.