1099-DA Crypto Reporting — New IRS Broker Rule 2026

The IRS is closing the crypto reporting gap. Starting with tax year 2025, centralized crypto exchanges must report your transactions on a new Form 1099-DA (Digital Assets) — similar to how stock brokers report on 1099-B. This means the IRS will know exactly what you sold and for how much.

Calculate your crypto taxes with the Crypto Tax Calculator.

What Is Form 1099-DA?

Form 1099-DA is a new information return specifically for digital asset transactions. Crypto exchanges and brokers will send it to:

You (the taxpayer)
The IRS

Detail Reported	Included?
Gross proceeds from sales	Yes
Date of sale	Yes
Cost basis (if known)	Starting 2026+ (phased in)
Date acquired	When basis is reported
Short-term vs long-term	When basis is reported
Asset description	Yes (e.g., "Bitcoin", "Ethereum")
Transaction type	Sale, exchange, etc.

Timeline

Year	What Happens
Tax year 2025	Exchanges report gross proceeds (no cost basis required yet)
Tax year 2026	Cost basis reporting begins for certain transactions
Tax year 2027+	Full cost basis reporting expected

The phased approach means early 1099-DAs may show what you sold but not what you paid. You'll still need to track cost basis yourself for 2025 transactions.

Who Must File 1099-DA?

Required reporters ("brokers"):

Centralized exchanges (Coinbase, Kraken, Gemini, Binance.US)
Hosted wallet providers that facilitate sales
Crypto payment processors
Certain digital asset kiosks (Bitcoin ATMs)

NOT required (yet):

Decentralized exchanges (Uniswap, SushiSwap)
Self-custodial wallets (MetaMask, Ledger)
Peer-to-peer transactions
DeFi protocols

This means DEX transactions, DeFi activities, and wallet-to-wallet transfers won't appear on 1099-DA. You're still responsible for reporting them — the IRS just won't get an automatic copy.

What This Means for You

If You Only Use Centralized Exchanges

Your life gets easier in some ways:

The exchange reports your transactions to the IRS
You'll receive 1099-DA by January 31 each year
You can use it to fill out Form 8949

But also more scrutiny:

The IRS can cross-check your return against the 1099-DA
Unreported sales will trigger automated notices
Even if the cost basis is wrong, the IRS sees the proceeds

If You Use DEXs and DeFi

Those transactions won't be on 1099-DA. You're still responsible for reporting them. The risk: the IRS sees your centralized exchange activity but not your DeFi activity. If the numbers don't add up (e.g., you transferred BTC to a DEX, swapped it, and never reported the swap), it could trigger questions.

Common Issues With 1099-DA

Cost basis may be wrong. Exchanges only know about transactions on their platform. If you:

Bought BTC on Exchange A
Transferred to Exchange B
Sold on Exchange B

Exchange B doesn't know your cost basis from Exchange A. The 1099-DA may show the full sale amount with no basis — making it look like the entire proceeds are taxable gain.

Fix: Report the correct cost basis on Form 8949, using the adjustment column. Keep your own records from Exchange A to prove the original purchase.

Multiple exchanges = multiple 1099-DAs. If you trade on three exchanges, you'll get three forms. You need to consolidate all of them on your return.

Transfers between your own wallets. Some exchanges may incorrectly report a transfer to your own wallet as a "disposition." If you see a 1099-DA reporting a self-transfer, you'll need to report it with zero gain and a code indicating it wasn't a sale.

How to Use Your 1099-DA

Step	Action
1	Receive 1099-DA from each exchange (by Jan 31)
2	Verify transactions match your records
3	Add any transactions NOT on the 1099-DA (DEX, DeFi, P2P)
4	Calculate cost basis for all transactions
5	Report on Form 8949 with appropriate box code (A/D if 1099-DA received, B/E if basis not reported)
6	Transfer totals to Schedule D

What If the 1099-DA Is Wrong?

Problem	Solution
Wrong proceeds amount	Contact exchange for correction; report correct amount on Form 8949 with explanation
Missing cost basis	Calculate yourself and enter on Form 8949
Self-transfer reported as sale	Report with $0 gain and explanation
Missing transactions	Add them manually (exchange glitch)

Do NOT just ignore a 1099-DA. The IRS receives a copy. If your return doesn't include those transactions, you'll get a CP2000 notice (proposed assessment of additional tax).

See how your crypto fits into your overall taxes with the Federal Tax Calculator.

Frequently Asked Questions

What does Form 1099-DA report to the IRS?

Form 1099-DA reports your gross proceeds from crypto sales, exchanges, and dispositions — similar to Form 1099-B for stocks. It includes the date of each transaction, proceeds amount, and (when available) your cost basis. The IRS receives a copy, so unreported crypto income is now far easier to detect. See How to Report Crypto on Form 8949 for filing your return correctly.

Do I still need to track my own crypto cost basis?

Yes. Early 1099-DA forms may not include complete cost basis information, especially for coins transferred between wallets or exchanges. If your basis is missing or incorrect, you're responsible for calculating it yourself. Keep records of every purchase, transfer, and wallet-to-wallet movement. See NFT Tax Guide for how digital collectibles are taxed differently.

Does the 1099-DA apply to DeFi and self-custody wallets?

Not yet for most DeFi platforms. The initial rule targets centralized exchanges (Coinbase, Kraken, Binance.US). DeFi broker rules are being phased in separately and face legal challenges. Self-custody wallet-to-wallet transfers are not taxable events. See IRS Audit Triggers for crypto-related audit red flags.

Official Resources

IRS — Federal tax information, forms, and filing
IRS Virtual Currency FAQ — Crypto tax guidance

This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.