If you trade on a U.S.-based centralized exchange, yes — you will get a 1099 for cryptocurrency, and starting with 2025 activity it arrives on a new form built specifically for digital assets: Form 1099-DA. Exchanges must send it to you and to the IRS. But the form only covers part of what the tax code considers taxable, and plenty of crypto activity generates a tax bill without generating any paperwork from a third party. Whether or not a form shows up, every taxable transaction still belongs on your return.
When the 1099-DA Arrives and What It Reports
Form 1099-DA (Digital Asset Proceeds from Broker Transactions) is the IRS’s purpose-built form for cryptocurrency. It replaces the mix of 1099-K and 1099-B forms exchanges had been using with inconsistent results. Congress created the reporting requirement when the Infrastructure Investment and Jobs Act expanded the tax code’s definition of “broker” to cover anyone who, for payment, regularly provides services facilitating transfers of digital assets for someone else.1Office of the Law Revision Counsel. 26 USC 6045 – Returns of Brokers
The rollout runs in two stages. For transactions on or after January 1, 2025, brokers must report your gross proceeds, meaning the total you received from selling or exchanging a digital asset. For transactions on or after January 1, 2026, brokers must also report your cost basis on covered securities, so the IRS can see not only what you sold for but what you originally paid.2Internal Revenue Service. Final Regulations and Related IRS Guidance for Reporting by Brokers on Sales and Exchanges of Digital Assets
In practice, if you traded on Coinbase, Kraken, Gemini, or a similar platform in 2025, expect your first 1099-DA early in 2026 with proceeds only. The 2026 version, arriving in early 2027, will look much more like a stock 1099-B, with columns for acquisition date, sale date, proceeds, and cost basis.
Which Platforms Send One
The broker definition captures centralized exchanges, certain payment processors, and hosted wallet providers — essentially any platform that takes custody of your assets and executes trades for you.3Internal Revenue Service. Instructions for Form 1099-DA
Decentralized exchanges that run through smart contracts and never hold your assets are not currently required to file 1099-DA forms. Treasury issued regulations in early 2025 that would have pulled DeFi platforms into broker reporting, but Congress repealed those rules under the Congressional Review Act in April 2025. Non-custodial platforms have no obligation to report your transactions to the IRS for the foreseeable future. Corporations generally don’t receive a 1099-DA either, though S corporations that acquired covered securities after 2012 are not exempt.
Exchanges that fail to file accurate forms face penalties of $250 per return, up to $3,000,000 per calendar year.4Office of the Law Revision Counsel. 26 USC 6721 – Failure to File Correct Information Returns That gives them strong incentive to report — but a missing or late form doesn’t erase your own obligation.
Other 1099 Forms Crypto Can Trigger
The 1099-DA covers sales and exchanges. Crypto can also produce income that shows up on a different form entirely.
- Form 1099-MISC. If you earned at least $600 in staking rewards, promotional airdrops, or interest from a lending platform, the payer may send a 1099-MISC. This income is taxed at your ordinary income rate, not as a capital gain.5Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information
- Form 1099-NEC. If you performed services as an independent contractor and were paid in crypto, the payer should issue a 1099-NEC for payments of $600 or more.6Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return
- Form 1099-K. Some exchanges historically used this form to report transaction volumes. The federal threshold has reverted to $20,000 in gross payments and more than 200 transactions per year, so most individual traders won’t see one.7Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
When No 1099 Shows Up But Tax Is Still Owed
Plenty of common crypto activity generates no third-party form. Some of it is genuinely tax-free. Some of it is not, and the record-keeping falls entirely on you.
Activity That Isn’t Taxable
Buying crypto with dollars and holding it is not a taxable event. You can leave tokens in cold storage indefinitely without owing anything or receiving any form.8Internal Revenue Service. Digital Assets Moving crypto between wallets you own — say, from an exchange to a hardware wallet — also doesn’t create a gain or loss, even if the exchange flags the withdrawal.9Internal Revenue Service. Frequently Asked Questions on Virtual Currency Transactions One narrow exception: if you pay the transfer fee in crypto, that fee is itself a disposal of the crypto used to pay it.
Taxable Activity Without a Form
Trading on a decentralized exchange creates taxable gains and losses, but no one sends you a form. The same is true for swapping one token for another through a DeFi protocol, providing or removing liquidity, and selling NFTs. You owe tax on the gain even though the IRS may not receive a matching information return.
Hard forks are a frequent source of confusion. If a blockchain forks and you receive new tokens through an airdrop, that’s ordinary income equal to the fair market value of the new tokens at the moment you gain control of them. If the fork doesn’t send new tokens your way, there’s nothing to report.9Internal Revenue Service. Frequently Asked Questions on Virtual Currency Transactions
The IRS treats digital assets as property. Every sale, trade, or spending of crypto is a disposal that can produce a capital gain or loss, whether or not paperwork follows it.8Internal Revenue Service. Digital Assets Staking rewards, mining income, and airdrops are ordinary income valued at fair market value on the date you receive them, reported on Schedule 1 of Form 1040. Capital gains and losses go on Form 8949 and flow to Schedule D.10Internal Revenue Service. Form 8949
The Digital Asset Question on Form 1040
Since 2022, the IRS has placed a mandatory question near the top of Form 1040 asking whether you received, sold, exchanged, or otherwise disposed of any digital asset during the tax year. For 2026, the question reads: “At any time during the tax year, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”11Internal Revenue Service. Determine How to Answer the Digital Asset Question
You can check “No” if you only held crypto without transacting, bought crypto with dollars but didn’t sell, or transferred between your own wallets without using crypto to pay the transfer fee. You must check “Yes” if you sold, traded, received staking rewards, got paid in crypto, or received an airdrop. Answering dishonestly when you had taxable activity is a red flag that can escalate an audit into a fraud investigation.
What to Do When the 1099 Is Wrong
This is where the reality of exchange reporting gets messy. Exchanges often report incorrect cost basis, especially on assets transferred in from another platform. If the exchange doesn’t know what you originally paid, it may report zero basis, which makes the whole sale look like profit. Even after the 2026 basis reporting rules kick in, assets you transferred in from another wallet or bought before the rules took effect may still arrive with missing or wrong figures.
If your 1099-DA has errors, contact the exchange and ask for a corrected form. Keep a record of the request in case the IRS later questions the mismatch. If a corrected form doesn’t arrive in time, file using your own accurate records: report the correct figures on Form 8949 and consider attaching a brief explanation of the discrepancy. Brokers aren’t required to correct errors of $100 or less unless you specifically ask.12Internal Revenue Service. Publication 1099 General Instructions for Certain Information Returns
Do not simply ignore a 1099 that overstates your income. The IRS has the same copy. If your return doesn’t match and you haven’t explained why, expect a notice.
What Happens If You Don’t Report
The IRS has several penalties for unreported crypto income, and they scale with how the failure looks.
- Accuracy-related penalty. If you understate your tax liability through negligence or a substantial understatement of income, the IRS adds a penalty of 20% of the underpayment.13Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
- Failure-to-file penalty. If you don’t file at all, the penalty is 5% of unpaid taxes per month, capped at 25%.
- Failure-to-pay penalty. If you file but don’t pay, the penalty is 0.5% of unpaid taxes per month, also capped at 25%.14Internal Revenue Service. Failure to Pay Penalty
- Interest. The IRS charges interest on unpaid taxes from the due date until the balance is paid, compounded daily.
- Criminal prosecution. Willful tax evasion is a felony carrying a fine of up to $100,000 and up to five years in prison.15Office of the Law Revision Counsel. 26 USC 7201 – Attempt to Evade or Defeat Tax
Criminal prosecution is rare and reserved for the most egregious cases: people who actively concealed large amounts of income, used mixers to hide transactions, or filed false returns. The civil penalties alone still add up. A 20% accuracy penalty on top of back taxes and interest gets expensive quickly, especially in a year when prices moved. The cheapest approach is to report every taxable transaction, even the ones no 1099 mentions.