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.
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