Form 1099-DA: How the IRS Now Tracks Your Crypto Sales

Your Crypto Sales Are Now on the IRS Radar

For years, crypto investors assumed the IRS could never connect their exchange sales to their tax return. That era is over. Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is the new information return that brokers file with the IRS and send to you, and it has applied to every custodial crypto sale since January 1, 2025. If you sold Bitcoin, Ethereum, or any other digital asset through a U.S. exchange last year, a 1099-DA has already been created for you. This guide walks you through what the form shows, what changed in 2025 versus 2026, and exactly how to move its numbers onto your return without overpaying.

Most 1099-DA copies for 2025 sales show gross proceeds only, with no cost basis attached. That single detail causes the most confusion, because proceeds alone do not equal taxable gain. By the end of this article you will know how to fill the gap, which Form 8949 codes to use, and where the rules quietly tighten in 2026.

What Is Form 1099-DA?

Form 1099-DA is an information return, not a tax bill. It was created after the Infrastructure Investment and Jobs Act tightened section 6045 broker reporting rules, and the IRS finalized the regulations in 2024. Starting with transactions on or after January 1, 2025, any broker that effects a sale of digital assets for a customer must file the form and furnish a payee statement. You can read the official overview on the IRS Form 1099-DA page.

Think of it as the crypto version of Form 1099-B for stocks. Your brokerage already reports stock sales this way, and the IRS now expects the same visibility into digital asset sales. The form reports the transaction details to the IRS and gives you a copy to use when you prepare your return. Nothing on the form itself calculates your tax — that is still your job, or your tax software's job.

One more thing worth knowing early: receiving a 1099-DA does not change what is taxable. Digital asset sales were always reportable. What changed is that the IRS now receives a third-party record of your gross proceeds, so unreported sales have become far easier to flag.

Who Sends a 1099-DA — and Who Never Will

The broker definition under the final regulations is broader than most investors expect. You will generally receive a 1099-DA from custodial trading platforms, digital asset kiosks (the Bitcoin ATMs in convenience stores count), and processors of digital asset payments that effect sales for customers. The IRS broker reporting FAQ confirms that a kiosk operator which lets customers sell digital assets for cash is a broker with full section 6045 reporting obligations.

Just as important is who is excluded. The rules draw a clear line around self-custody:

• Wallet software and hardware sellers that only let you control your own private keys
• Pure proof-of-work or proof-of-stake validators with no other services
• Custodians that hold assets but never effect a sale for you

A swap inside a self-custody wallet, a peer-to-peer sale, or a sale on a foreign platform that does not serve U.S. reporting obligations generates no 1099-DA. The tax liability still exists — you simply become your own recordkeeper.

What Brokers Reported in 2025 vs. What Changes in 2026

The rollout happens in phases, and mixing up the years is the most common mistake. For sales effected during 2025, brokers reported gross proceeds only. Basis reporting was deliberately held back, and Notice 2024-56 gave brokers transitional penalty relief for those first-year filings as long as they made good-faith efforts to report accurately.

For sales in 2026 and beyond, the form becomes much richer. Brokers must report gross proceeds for all digital assets and must also report cost basis for covered securities — digital assets acquired through the broker after January 1, 2025, that never left that broker's custody. For noncovered securities, anything acquired before 2025 or transferred in from elsewhere, the broker checks box 9 and may report basis voluntarily, but is not required to. The Form 1099-DA instructions spell out this covered-versus-noncovered split in detail.

Two narrower rules round out the picture. Processors of digital asset payments do not have to report a customer's payment-related sales when they total $600 or less for the year — but if sales cross that threshold, every sale becomes reportable. Separately, brokers may use optional reporting methods for qualifying stablecoins and specified NFTs, which relaxes basis and certain other fields for those asset classes.

Every Box on Form 1099-DA, Explained

The form looks dense, but it follows the same skeleton as Form 1099-B. Each sale gets its own form, and the boxes describe the asset, the transaction, and how much the IRS can trust the numbers. The identifier in box 1a is a nine-character digital token identifier issued by the Digital Token Identifier Foundation (DTIF); assets not registered with DTIF get the placeholder code 999999999.

Watch box 1i closely if you trade tokenized stocks or funds on-chain. Wash sale rules under section 1091 apply to tokenized securities, and brokers must report disallowed losses when the sale and repurchase happen in the same account with the same CUSIP. Ordinary Bitcoin and Ether trades stay outside section 1091 for now — a distinction we break down further in our guide to how the wash sale rule works.

Moving 1099-DA Numbers Onto Form 8949 and Schedule D

Your 1099-DA does not file itself onto your return. Each sale transfers to Form 8949, and the totals flow to Schedule D, where short-term and long-term results separate. The 1099-DA instructions define four new adjustment codes that tell the IRS whether the basis on each line came from your broker or from you:

Because most 2025 forms show proceeds only, most of your lines will carry code H or K — and the burden of supplying accurate basis falls on you. If you use box 1f proceeds as your basis, you will report a gain equal to 100 percent of your sale proceeds and massively overpay. Our step-by-step guide to how to report stock sales on Form 8949 uses the same mechanics, and the process for digital assets is identical once the basis is right.

Timing matters here too. A sale held for more than one year is long-term and lands in the 0, 15, or 20 percent rate brackets, while anything held twelve months or less is taxed at ordinary income rates. If you are unsure how those rates stack, our guide on how to calculate your capital gains tax step by step covers the full math.

Worked Example: An Ethereum Sale With Proceeds-Only Reporting

Suppose your 1099-DA for 2025 shows a single line: 2.0 ETH sold on July 18, box 1f gross proceeds of $6,400, and box 1g blank. The form is accurate, but it is only half the story. You purchased 1.0 ETH for $1,800 in 2023 and another 1.0 ETH for $3,100 in 2024, both through the same exchange.

Using first-in, first-out without specific identification, the two oldest lots sell first. Your total basis is $1,800 plus $3,100, which equals $4,900. Your capital gain is $6,400 minus $4,900, or $1,500. Both lots were held more than a year, so the entire gain is long-term, and code K applies on Form 8949 because your broker never reported basis. At a 15 percent long-term rate, that gain costs about $225 — not the $960 you would owe if you let the proceeds stand in for your gain.

This is why the paperwork behind your basis matters more every year. Our guide to how to calculate crypto cost basis covers FIFO, specific identification, and the wallet-by-wallet rules that kicked in for 2025, including the documentation the IRS expects you to keep.

No 1099-DA? You Still Owe the Reporting

The absence of a form has never been an excuse at tax time. Sales from a self-custody wallet swap, a decentralized exchange, a peer-to-peer trade, or a foreign platform without U.S. reporting obligations still belong on your return. Form 1040 keeps its digital asset question at the top, and answering it falsely carries real penalties. Our overview of how crypto capital gains tax works explains the reporting duties that exist with or without broker paperwork.

Brokers generally must furnish your payee statement copy by February 17 of the following year, so a missing form by mid-February is a signal to chase it down — not to skip the sale. Check the platform's tax documents section first, then contact support, and reconcile whatever you can from your own records in the meantime. Every 1099-DA lands on the exchange's tax center page as a downloadable PDF, and copies B, 1, and 2 are fillable online at IRS.gov/Form1099DA if you ever need to reconstruct one.

Mistakes That Turn a Simple 1099-DA Into a Tax Problem

The most expensive error is treating box 1f as your gain. Proceeds are revenue, not profit, and the gap between the two is exactly what your basis documentation fills. The second mistake is ignoring small sales. Kiosk and payment-app sales under $600 escape reporting in some cases, but no de minimis rule exists for the income tax itself — a $40 gain is still taxable.

Investors also trip over transferred-in assets. Basis that one broker holds does not automatically travel to a new broker, and the instructions restrict how transferring-broker data gets used, which is why box 8 exists and why 2026 forms may still show blank basis for assets you moved in. Finally, do not assume the form's date acquired is authoritative for older lots; brokers often backfill transfer-in dates instead of your original purchase date, which can silently change your holding period and your rate.

Before you file, match every 1099-DA line to a Form 8949 line and keep your purchase records together in one folder. Ten minutes of reconciliation beats an IRS matching notice, and if the numbers feel tangled, our crypto capital gains calculator turns your trade history into a clean gain-or-loss picture in minutes. Once the amounts are set, the same figures feed your state return, because most states tax these gains as ordinary income with no preferential rate.