Form 1099-DA is the IRS information return that brokers use to report your digital asset sales, and it applies to transactions made on or after January 1, 2025. For the 2025 tax year, your broker reports only the gross proceeds of each sale. Starting with 2026 transactions, brokers must also report your cost basis for covered assets, giving the IRS a much fuller picture of your gains and losses. The form exists because the Infrastructure Investment and Jobs Act of 2021 expanded the definition of “broker” to include anyone who regularly facilitates digital asset transfers for others, pulling cryptocurrency exchanges into the same reporting framework that has long applied to stock brokerages. You report the numbers on Form 8949 and Schedule D of your Form 1040.
What Form 1099-DA Reports and When
The rollout is phased, and the phase you’re in determines how much of the math your broker has already done for you.
- For 2025 transactions, brokers report gross proceeds only. Your first Form 1099-DA should have arrived by February 17, 2026.
- For 2026 transactions and beyond, brokers report both gross proceeds and cost basis for covered assets. Those forms are due to you by March 15, 2027.1Internal Revenue Service. 2026 Instructions for Form 1099-DA
The IRS runs an automated matching system against these forms, so a return that doesn’t line up with what your broker reported tends to get flagged.
Who Sends You One
The obligation falls on “digital asset brokers” as defined under 26 U.S.C. ยง 6045(c)(1)(D), covering anyone who regularly provides services that facilitate digital asset transfers for others.2Office of the Law Revision Counsel. 26 USC 6045 – Returns of Brokers In practice that means centralized exchanges like Coinbase, Kraken, and Gemini, hosted wallet providers that hold your private keys, crypto ATM operators, and payment processors that let merchants accept crypto when volumes cross the reporting thresholds.
One category is missing: decentralized finance platforms. The IRS finalized a rule in late 2024 that would have required certain DeFi platforms to report as brokers, and Congress nullified it in early 2025 under the Congressional Review Act.3Congress.gov. H.J.Res.25 – 119th Congress (2025-2026) DeFi protocols operating without a controlling intermediary have no current obligation to file Form 1099-DA. The transactions are still taxable. You just won’t receive a form, and the record-keeping is on you.
Which of Your Transactions Trigger the Form
A broker generates a Form 1099-DA whenever you dispose of a digital asset. The IRS treats digital assets as property, so parting with one is a taxable event. The common triggers are selling crypto for cash, trading one crypto for another (even without touching dollars, you realized a gain or loss on what you gave up), and using crypto to pay for goods or services at fair market value.
Wallet-to-wallet transfers you control on both ends are generally not reportable, because ownership doesn’t change and no gain or loss is realized.4Internal Revenue Service. Digital Assets If you pay a transaction fee in digital assets to make that transfer, though, the fee itself counts as a small disposition.
Stablecoin Carve-Outs
Two exemptions apply to qualifying stablecoins, meaning digital assets pegged to a fiat currency. Selling a qualifying stablecoin to buy another digital asset (USDC for Ethereum, for example) is exempt from 1099-DA reporting entirely. Selling qualifying stablecoins for cash or other qualifying stablecoins is also exempt if your total proceeds stay below $10,000 for the year. These transactions remain technically taxable if you somehow realize a gain, but no form will arrive.
Staking, Mining, and Other Deferred Activities
Several activities are temporarily deferred from Form 1099-DA reporting under IRS Notice 2024-57 while Treasury studies how to handle them: wrapping and unwrapping tokens, liquidity provider transactions, staking, lending, short sales, and notional principal contract transactions.5Internal Revenue Service. Notice 2024-57
Deferred from reporting is not the same as tax-free. Staking and mining rewards are taxable as ordinary income the moment you gain control of the new tokens, valued at fair market value on the date you receive them.6Internal Revenue Service. Revenue Ruling 2023-14 Your broker may report those rewards on Form 1099-MISC, or may not report them at all. You’re responsible for the income either way.
Reading the Boxes
A handful of fields on Form 1099-DA feed directly into your return.
- Box 1f, gross proceeds: what you received from the sale before costs. This is the starting point for your gain or loss.
- Box 1g, cost basis: what you originally paid, including commissions and fees. Blank for many 2025 sales; required on 2026 sales of covered assets.
- Boxes 1c and 1d, acquisition and disposition dates: these decide whether your gain is short-term or long-term, which drives the rate.
- Box 6, gain or loss: the calculated difference between proceeds and basis.
Covered Versus Uncovered
A digital asset is a “covered” asset if you acquired it after 2025 in an account where your broker provides custody, and you held it there until selling.7Internal Revenue Service. Instructions for Form 1099-DA For covered assets, your broker reports basis to the IRS, and mismatches with your return will get noticed. For uncovered assets, meaning anything acquired before 2026 or held outside a custodial account, the broker may report only gross proceeds. You have to prove what you paid.
This is where many filers will slip. If you bought Bitcoin in 2023 and sell it in 2026, your broker reports the proceeds but probably not your basis. If you don’t fill in the basis yourself, the IRS matching system sees a large proceeds figure with nothing to offset it and may treat the entire amount as gain. Keep your original purchase records.
How to Report It on Your Return
Each transaction on your Form 1099-DA gets its own line on Form 8949, which is the IRS form for sales of capital assets.8Internal Revenue Service. Instructions for Form 8949 (2025) Match the proceeds and basis from the 1099-DA to the corresponding columns on Form 8949. If the broker’s numbers are right, they flow straight through. If you need to adjust something, like a missing or wrong cost basis, Form 8949 has an adjustment column for that.
The totals from Form 8949 roll up to Schedule D of your Form 1040, where net capital gains and losses are calculated alongside any other investment activity.9Internal Revenue Service. Form 8949 – Sales and Other Dispositions of Capital Assets Assets held more than one year get long-term capital gains rates; one year or less gets your ordinary income rate.10Internal Revenue Service. Topic No. 409, Capital Gains and Losses If you used multiple exchanges, expect a separate Form 1099-DA from each and combine them all on Form 8949. For active traders, reconciling forms from several platforms against your own records is the step that takes real time.
One point on the wash sale rule: the federal wash sale rule that blocks a loss deduction when you repurchase the same stock within 30 days does not currently apply to digital assets, because the IRS classifies crypto as property rather than a security. Legislation to extend it has been proposed but has not passed as of early 2026.
Transactions Without a Form 1099-DA
You owe tax on digital asset gains whether or not a form arrives. Common situations that produce no Form 1099-DA include DeFi swaps after the Congressional Review Act reversal, transactions on non-U.S. exchanges, qualifying stablecoin sales below the $10,000 threshold, and the deferred categories under Notice 2024-57. In all of these, you still report the activity on Form 8949 and Schedule D from your own records. The absence of an information return doesn’t eliminate the tax obligation.
Fixing an Error on the Form
If your Form 1099-DA has a mistake, contact the broker that issued it. The filer’s name and contact information sit in the top-left corner of the form. The IRS cannot correct a broker’s form on your behalf.11Internal Revenue Service. Understanding Your Form 1099-DA
Don’t wait for a corrected form to file. Use the best information you have, file on time, and amend later if needed. Keep the corrected form and all correspondence with the broker. If the IRS sends you a CP2000 notice because your return doesn’t match what the broker reported, respond by the date on the notice with documentation explaining the difference.12Internal Revenue Service. Understanding Your CP2000 Series Notice
Penalties for Not Reporting
Taxpayers who underreport digital asset income face an accuracy-related penalty equal to 20% of the underpayment.13Office of the Law Revision Counsel. 26 US Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments Willful tax evasion, meaning intentionally hiding crypto gains, escalates to criminal prosecution, a fine of up to $100,000, or up to five years in prison.14Office of the Law Revision Counsel. 26 USC 7201 – Attempt to Evade or Defeat Tax The evasion threshold requires proof of willful intent, not sloppy math, but the IRS has been prosecuting crypto tax cases with growing frequency, and now that broker data is flowing directly to the agency, missing transactions are easier for it to spot.