IRS Form 1099-DA Explained: New Crypto Tax Reporting Rules for 2026

If you traded cryptocurrency on a centralized exchange in 2025, you may have already received a strange new tax document in your inbox: Form 1099-DA. This is the first year the IRS has required crypto brokers to issue this form, and the confusion surrounding it is massive. Incomplete data, missing cost basis, delayed delivery from exchanges, and a whole new set of wallet-by-wallet tracking rules have left millions of crypto investors scrambling.

This guide breaks down everything you need to know about the 1099-DA for the 2026 tax filing season, what it reports, what it leaves out, and exactly what you need to do to file accurately and avoid IRS penalties.

What Is Form 1099-DA?

Form 1099-DA stands for "Digital Asset Proceeds From Broker Transactions." It is a brand-new IRS information return that centralized crypto exchanges and custodial brokers are now required to send to both you and the IRS. Think of it as the crypto equivalent of the Form 1099-B that stock brokers have sent for decades.

The form was created under final regulations issued by the IRS in 2024 and applies to digital asset transactions effected on or after January 1, 2025. The first batch of 1099-DAs, covering your 2025 trading activity, arrived (or should have arrived) in early 2026.

The goal is straightforward: the IRS wants a direct data pipeline between crypto exchanges and the tax agency so it can automatically match reported proceeds against what you file on your tax return.

Who Gets a 1099-DA?

You will receive a Form 1099-DA if you sold, exchanged, or otherwise disposed of digital assets through a custodial broker during the 2025 tax year. In practice, this means users of centralized exchanges like Coinbase, Kraken, Gemini, Crypto.com, and similar platforms.

The form covers:

• Sales of cryptocurrency (e.g., selling Bitcoin for USD)
• Crypto-to-crypto trades (e.g., swapping ETH for SOL)
• Payments made with crypto (spending Bitcoin to buy goods)
• Certain other dispositions effected through a broker

If you only purchased crypto and held it without selling, you should not receive a 1099-DA for those holdings. The form only covers dispositions, not acquisitions.

What Does the 1099-DA Report (and What Is Missing)?

Here is where the confusion begins. For the 2025 tax year, the 1099-DA reports gross proceeds only. That means the form tells the IRS how much you received from each sale, but it does not include your cost basis, meaning it does not show what you originally paid for the asset.

What the 2025 Form 1099-DA Includes

• Gross proceeds from each digital asset transaction
• Date of the sale or disposition
• Type of digital asset sold
• Transaction ID information

What the 2025 Form 1099-DA Does NOT Include

• Cost basis (what you paid for the asset)
• Acquisition date (when you bought it)
• Gain or loss calculation

This omission is by design. The IRS phased in reporting requirements gradually. Brokers must report gross proceeds for transactions starting January 1, 2025, but cost basis reporting does not kick in until transactions occurring on or after January 1, 2026. That means the first 1099-DAs with cost basis data will not arrive until early 2027.

Why Missing Cost Basis Is a Serious Problem

The absence of cost basis on the 2025 Form 1099-DA creates a dangerous trap for unprepared taxpayers. When the IRS receives a 1099-DA showing $50,000 in gross proceeds but no cost basis, its automated matching system can treat the entire $50,000 as taxable profit if you fail to report the correct basis on your return.

For example, say you bought 1 Bitcoin for $40,000 and later sold it for $50,000. Your actual gain is $10,000. But if you do not report the $40,000 cost basis on Form 8949, the IRS may send you a CP2000 notice assessing tax on the full $50,000, an overpayment of potentially thousands of dollars.

This is why you cannot simply file your tax return based on the 1099-DA alone. You need to supply your own cost basis records.

How to Fill in the Cost Basis Gap

You have several options for reconstructing your cost basis:

1. Exchange transaction history: Download your full transaction history from every exchange you have used. Most platforms let you export CSV files covering all buys, sells, deposits, and withdrawals.

2. Blockchain records: For on-chain transactions, you can use blockchain explorers to verify purchase dates and amounts.

3. Crypto tax software: This is the most practical solution for anyone with more than a handful of transactions.

   Partner CoinLedger Try Free
   imports your exchange data and fills in the cost basis the 1099-DA is missing. It connects to over 600 exchanges and wallets, automatically matches transfers between your accounts, and calculates accurate cost basis using FIFO, LIFO, HIFO, or Specific Identification methods. The platform then generates IRS-ready Form 8949 reports you can file directly or import into TurboTax.

The New Wallet-by-Wallet Basis Tracking Rule

Starting January 1, 2025, the IRS requires you to track cost basis on a wallet-by-wallet and account-by-account basis. This is a significant change from how many crypto investors previously handled their taxes.

Under the old approach, some taxpayers treated all their holdings across multiple exchanges, wallets, and cold storage devices as one universal pool. They could cherry-pick the most tax-advantageous cost basis from any account when reporting a sale.

That is no longer permitted. Under the new rules:

• Each centralized exchange account (your Coinbase account, your Kraken account, etc.) is treated as a separate account
• Each self-hosted wallet (MetaMask, Ledger, Trezor, etc.) is treated as a separate wallet
• When you sell crypto from a specific wallet or exchange, you must use the cost basis of assets held in that same account

The IRS gave taxpayers until December 31, 2025 to allocate their existing holdings to the correct wallets and determine which tax lots reside in which accounts. If you have not yet done this allocation, you need to address it before filing your 2025 return.

DeFi, NFTs, and What the 1099-DA Does NOT Cover

The 1099-DA only applies to custodial brokers, meaning centralized exchanges and similar entities that take custody of your assets. A significant portion of crypto activity falls outside its scope.

DeFi Transactions

In early 2025, Congress used the Congressional Review Act (CRA) to overturn the portion of the IRS final regulations that would have extended broker reporting to non-custodial DeFi protocols. As a result, decentralized exchanges, automated market makers, and DeFi lending platforms are not required to issue 1099-DAs.

This means the following will not appear on any 1099-DA:

• Token swaps on Uniswap, SushiSwap, or similar DEXs
• Yield farming and liquidity provision
• DeFi lending and borrowing
• Staking rewards earned through DeFi protocols
• Wrapping and unwrapping transactions

NFT Activity

NFTs (non-fungible tokens) have a carve-out as well. For "specified NFTs," which are unique, indivisible tokens that do not represent an interest in excluded property, brokers may use optional reporting methods that do not require basis information. Most peer-to-peer NFT sales on marketplaces like OpenSea or Blur will not generate a 1099-DA.

Critical Warning: No 1099-DA Does Not Mean No Tax

The absence of a 1099-DA for DeFi and NFT activity does not mean those transactions are tax-free. You are still legally required to report all gains and losses from every crypto transaction, regardless of whether you receive a tax form. The IRS digital asset question on Form 1040 asks whether you received, sold, exchanged, or otherwise disposed of any digital assets, and answering "no" when the answer is "yes" is considered a false statement.

What to Do If Your 1099-DA Is Wrong

Early reports from the 2026 filing season indicate that 1099-DA errors are widespread. Common issues include:

Inflated or Incorrect Proceeds

Some exchanges use different price oracles than crypto tax software, leading to small discrepancies in reported proceeds. In most cases, you should use the proceeds figure from your 1099-DA on your Form 8949, because that is the number the IRS has on file. Matching it exactly avoids triggering an automated mismatch notice.

If the discrepancy is large (hundreds or thousands of dollars), contact your exchange and request a corrected 1099-DA.

Transfers Reported as Sales

When you transfer crypto between your own wallets, you pay network (gas) fees. Some exchanges treat these transfers as dispositions, because spending crypto on transaction fees is technically a taxable event. This can make your 1099-DA look like you sold more than you actually did.

Review your form carefully and compare it against your actual trading activity. Transfers between your own wallets are not sales of the underlying asset (though the fee portion may be).

Transactions You Do Not Recognize

In rare cases, a 1099-DA may include transactions you never made. This could indicate a platform error or, in extreme cases, unauthorized account access. Contact the exchange immediately, request a corrected form, and document all correspondence.

How to Report When You Disagree

If your 1099-DA has incorrect cost basis (or no cost basis, as is the case for 2025), you do not need to request a corrected form just to supply your own basis. Simply report your correct cost basis on Form 8949 alongside the proceeds from the 1099-DA. Keep thorough records to support your reported figures in case of an audit.

Penalties for Not Reporting

The IRS is now running automated matching between 1099-DA data and individual tax returns. If you received a 1099-DA and do not report the corresponding transactions, expect consequences:

• CP2000 Notice: The IRS will send a notice stating you failed to report income, calculating the tax due on the full gross proceeds amount (assuming zero cost basis)
• Accuracy-Related Penalty: A 20% penalty on the underpayment amount if the IRS determines you were negligent or substantially understated your income
• Failure-to-File Penalty: 5% of the unpaid tax per month (up to 25%) if you do not file your return at all
• Interest: The IRS charges interest on unpaid tax from the original due date, compounding daily

Note that for the 2025 tax year, the IRS has granted penalty relief to brokers who make a good-faith effort to file 1099-DAs correctly and on time. This relief applies to the exchanges, not to you as a taxpayer. Your obligation to report accurately remains fully in effect.

How to Reconcile Your 1099-DA With Your Own Records

Follow this process to ensure your tax filing is accurate:

Step 1: Gather all 1099-DAs. Check every exchange you used in 2025. Some smaller platforms may be delayed. Major exchanges like Coinbase and Kraken have reported delays, with some forms not available until mid-March 2026.

Step 2: Download full transaction histories. Export CSV files from every exchange and wallet. Include all buys, sells, deposits, withdrawals, and transfers.

Step 3: Import everything into crypto tax software.

Step 4: Compare proceeds. Match the gross proceeds on each 1099-DA against what your tax software calculates. Small differences (under a few dollars per transaction) are normal due to rounding and price source variations. Use the 1099-DA figure.

Step 5: Verify cost basis. Since the 2025 1099-DA does not include cost basis, confirm that your tax software has calculated it correctly using your chosen accounting method (FIFO, LIFO, HIFO, or Specific ID) on a wallet-by-wallet basis.

Step 6: Generate Form 8949. Your crypto tax software should produce a completed Form 8949 listing every transaction with proceeds, cost basis, and gain or loss. This is what you attach to your tax return.

Step 7: File and keep records. Retain your 1099-DAs, transaction histories, and tax software reports for at least three years (six years if gross income is understated by more than 25%).

Key Dates and Timeline

If you have not received your 1099-DA by mid-March, contact your exchange directly. Do not assume the absence of a form means you have nothing to report. File based on your own records if necessary, and amend later if a corrected form arrives.

Frequently Asked Questions

Do I have to report crypto on my taxes if I did not receive a 1099-DA?

Yes. The IRS requires you to report all digital asset transactions regardless of whether you receive a tax form. DeFi users, NFT traders, and anyone using non-custodial platforms will not receive a 1099-DA but must still report gains and losses.

Why is my cost basis blank or missing on the 1099-DA?

For the 2025 tax year, brokers are not required to report cost basis. This is the first year of 1099-DA reporting, and the IRS phased in requirements starting with gross proceeds only. Cost basis reporting begins for transactions occurring on or after January 1, 2026.

What happens if I do not report my 1099-DA?

The IRS will match the 1099-DA data against your tax return. If the proceeds are missing, you will receive a CP2000 notice, and the IRS will calculate tax owed assuming your cost basis is zero, meaning 100% of the proceeds are treated as taxable income. Accuracy-related penalties of 20% may also apply.

Can I use a different cost basis than what my exchange shows?

Yes. You can report your own cost basis on Form 8949, even if it differs from (or is absent on) the 1099-DA. You must have records to support your figures, such as transaction histories, blockchain records, or crypto tax software reports.

Does the 1099-DA cover DeFi and NFT transactions?

No. Congress overturned the regulations that would have required DeFi protocols to issue 1099-DAs. Only custodial brokers (centralized exchanges) are currently required to file. However, you are still responsible for reporting DeFi and NFT activity on your own.

What is the wallet-by-wallet tracking rule?

Starting January 1, 2025, the IRS requires cost basis to be tracked separately for each exchange account and self-hosted wallet. You can no longer pool all holdings across platforms and select the most favorable cost basis from any account. Each sale must use the basis from the account where the asset was held.

How do I calculate cost basis if I have used multiple exchanges?

This is one of the most common challenges with the new 1099-DA system. You need to reconstruct your full transaction history across every platform, track transfers between accounts, and apply your chosen accounting method per wallet.

When will the 1099-DA include cost basis?

Brokers will be required to report cost basis for digital asset transactions occurring on or after January 1, 2026. The first 1099-DAs with cost basis information will arrive in early 2027 for the 2026 tax year.

The Bottom Line

Form 1099-DA is the biggest shift in crypto tax enforcement in years. For the first time, the IRS has a direct line of sight into your exchange activity, and its automated matching system is actively comparing what brokers report against what shows up on your return.

The critical takeaway for the 2026 filing season: your 1099-DA is incomplete by design. It shows proceeds but not cost basis. If you file based on the form alone, or worse, ignore it entirely, you risk overpaying on taxes or triggering an IRS notice.

The smartest move is to pair your 1099-DA with comprehensive crypto tax software.

Do not wait until April 14th to sort this out. The new rules are here, the IRS is watching, and the cost of getting it wrong, whether through overpaying or underpaying, is too high to leave to guesswork.