If you bought, sold, or traded cryptocurrency in 2025, you’re about to encounter a brand-new IRS form: Form 1099-DA. This is the first year crypto brokers are required to report your digital asset transactions directly to the IRS—and that changes everything for crypto tax compliance.
Whether you’re a casual Bitcoin holder, an active trader, or an NFT collector, this guide explains what Form 1099-DA means for you, what information it contains, and how to use it when filing your 2025 tax return.
Quick Summary
| Aspect | Details |
|---|---|
| Purpose | Report digital asset sales from broker transactions |
| First year required | 2025 transactions (forms issued January 2026) |
| Who issues it | Cryptocurrency exchanges and digital asset brokers |
| Who receives it | Anyone who sold digital assets through a broker |
| Reporting threshold | All sales must be reported (no minimum threshold) |
| Deadline to receive | January 31, 2026 |
| Used with | Form 8949 and Schedule D (Form 1040) |
What Is Form 1099-DA?
Form 1099-DA (Digital Asset Proceeds From Broker Transactions) is a new IRS information return that reports the sale, exchange, or disposal of digital assets through a broker. Think of it as the crypto equivalent of Form 1099-B, which reports stock and securities sales.
Starting with 2025 transactions, cryptocurrency exchanges like Coinbase, Kraken, Gemini, and Binance.US are required to send this form to both you and the IRS when you sell digital assets.
What Are Digital Assets?
For tax purposes, a digital asset is any digital representation of value recorded on a cryptographically secured distributed ledger (like a blockchain). This includes:
- Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Solana (SOL), and thousands of others
- Stablecoins: USDC, USDT, DAI, and other tokens pegged to fiat currencies
- NFTs: Non-fungible tokens representing digital art, collectibles, and other unique assets
- Tokenized securities: Traditional securities represented on a blockchain
- Wrapped tokens: Tokens representing assets from other blockchains
Important: Digital assets do not include U.S. dollars or other fiat currencies issued by governments, even if held in digital form.
Why Form 1099-DA Matters
Before 2025: The Wild West
Previously, crypto tax reporting was largely on the honor system. While the IRS required taxpayers to report crypto gains, exchanges weren’t required to report transactions directly to the IRS. This led to:
- Widespread underreporting of crypto gains
- Confusion about what to report
- Inconsistent reporting across exchanges
- Limited IRS visibility into crypto transactions
Starting 2025: Full Transparency
Form 1099-DA fundamentally changes crypto taxation by creating a paper trail:
| Before (2024 and earlier) | After (2025 and later) |
|---|---|
| Exchanges reported only to users | Exchanges report to users AND IRS |
| No standardized reporting format | Standardized Form 1099-DA |
| Limited IRS matching capability | Full IRS matching like stocks |
| Easy to “forget” transactions | Every sale creates an IRS record |
Bottom line: The IRS will now receive a copy of every digital asset sale you make through a broker. If you don’t report it, they’ll know.
Who Receives Form 1099-DA?
You’ll Receive a 1099-DA If:
You sold, exchanged, or disposed of digital assets through a U.S. digital asset broker during 2025, including:
- Selling crypto for cash (e.g., selling Bitcoin for USD)
- Trading crypto for crypto (e.g., swapping ETH for SOL)
- Spending crypto (e.g., using Bitcoin to buy goods)
- Selling NFTs for cash or other digital assets
- Converting stablecoins to different digital assets
You Won’t Receive a 1099-DA For:
- Buying crypto with cash — Purchases aren’t taxable events
- Transferring between your own wallets — Moving assets isn’t a sale
- Holding crypto — No sale means no form
- DeFi activities (currently exempt) — See “What’s Not Reported” below
- Mining/staking rewards — Reported differently (often as income)
- Airdrops — Typically reported as ordinary income elsewhere
Who Must Issue Form 1099-DA?
A “broker” for 1099-DA purposes includes any person who, in the ordinary course of business, stands ready to effect digital asset sales. This includes:
Brokers Who Must Report
| Broker Type | Examples |
|---|---|
| Centralized exchanges | Coinbase, Kraken, Gemini, Binance.US |
| Trading platforms | Robinhood (crypto), Cash App (Bitcoin) |
| Custodial services | Anchorage, BitGo, Fidelity Digital Assets |
| Digital asset kiosks | Bitcoin ATMs |
| Payment processors | BitPay, Coinbase Commerce |
Not Required to Report (Currently)
| Entity Type | Reason |
|---|---|
| DeFi protocols | No broker relationship |
| Self-custody wallets | No broker involved |
| Peer-to-peer transfers | No intermediary |
| Mining pools | Different reporting rules |
| Hardware wallet manufacturers | Just provide software/hardware |
Note: Treasury and IRS regulations continue to evolve. DeFi reporting requirements may expand in future years.
What Information Is on Form 1099-DA?
Form 1099-DA contains detailed information about each digital asset transaction:
Key Boxes Explained
| Box | Information | Example |
|---|---|---|
| Box 1a | Digital token identifier (DTIF code) | 9-character code like “D001BTC00” |
| Box 1b | Name of digital asset | ”Bitcoin” or “Ethereum” |
| Box 1c | Number of units sold | 0.5 (to 18 decimal places) |
| Box 1d | Date acquired | 05/15/2024 |
| Box 1e | Date sold | 03/20/2025 |
| Box 1f | Proceeds (sale price) | $25,000.00 |
| Box 1g | Cost or other basis | $20,000.00 |
| Box 2 | Basis reported to IRS | ☑ (checkbox) |
| Box 4 | Federal tax withheld | $0.00 (usually) |
| Box 6 | Gain or loss type | Short-term or Long-term |
| Box 9 | Noncovered security | ☑ if applicable |
Understanding Covered vs. Noncovered Securities
This distinction is crucial for 2025 and 2026:
| Category | Definition | Basis Reported? |
|---|---|---|
| Covered security | Digital asset acquired after 2025 in a custodial account | Yes, mandatory |
| Noncovered security | Digital asset acquired before 2026 OR transferred in | Optional (voluntary) |
For 2025 transactions: All digital assets sold in 2025 are considered noncovered securities. Brokers may voluntarily report your cost basis, but they’re not required to. This means you may need to calculate and track your own basis.
Starting 2026: Digital assets purchased through a broker after January 1, 2026 become covered securities, requiring mandatory basis reporting.
2025 vs. 2026: What’s Different?
The 1099-DA requirements phase in over two years:
2025 Transactions (Filing in 2026)
| Requirement | Status |
|---|---|
| Report gross proceeds | ✅ Mandatory |
| Report cost basis | ⚪ Voluntary |
| Report acquisition date | ⚪ Voluntary |
| Report gain/loss | ⚪ Voluntary |
| Penalty relief for basis errors | ✅ Yes |
2026 Transactions and Beyond (Filing in 2027+)
| Requirement | Status |
|---|---|
| Report gross proceeds | ✅ Mandatory |
| Report cost basis (covered securities) | ✅ Mandatory |
| Report acquisition date | ✅ Mandatory |
| Report gain/loss | ✅ Mandatory |
| Full penalty exposure | ✅ Yes |
What this means for you:
For 2025, your 1099-DA may show proceeds but not cost basis. You’re still responsible for calculating and reporting your actual gain or loss on your tax return—even if the broker doesn’t provide it.
Special Reporting Rules
Qualifying Stablecoins
Brokers can use an optional aggregate reporting method for stablecoin transactions. Instead of reporting each individual swap:
- All designated stablecoin sales can be combined on one form
- Number of transactions is reported (Box 11b)
- Individual acquisition dates and basis not required
This simplifies reporting for traders who frequently move between stablecoins and other assets.
Specified NFTs
Similar optional rules exist for NFTs:
- NFT sales can be aggregated on a single form
- First sales by creators/minters reported separately (Box 11c)
- Individual basis tracking not required under optional method
Tokenized Securities
If a digital asset represents traditional securities (stocks, bonds), special rules apply:
- Wash sale rules may apply (losses disallowed if repurchased within 30 days)
- Average basis method may be available
- Accrued market discount may be reported
What’s NOT Reported on Form 1099-DA?
Certain transactions are explicitly excluded from 1099-DA reporting:
Currently Exempt Transactions
| Transaction Type | Why Exempt |
|---|---|
| Wrapping/unwrapping tokens | Technical operation, not a sale |
| Providing liquidity | Pending further IRS guidance |
| Staking deposits/withdrawals | Not a sale event |
| Crypto lending | Pending further IRS guidance |
| Short sales | Pending further IRS guidance |
| Notional principal contracts | Pending further IRS guidance |
Note: While these transactions may not be reported on 1099-DA, they may still have tax consequences that you need to report. Consult a tax professional for guidance on DeFi and complex crypto transactions.
Rewards and Staking Income
Mining rewards, staking payments, and airdrops are not reported on Form 1099-DA. These are typically treated as ordinary income when received and may be reported on:
- Form 1099-MISC (Box 3 for prizes/awards)
- Form 1099-NEC (if considered payment for services)
- Self-reported as other income on Schedule 1
How to Use Form 1099-DA on Your Tax Return
Step 1: Collect All Your 1099-DAs
You may receive multiple forms from different exchanges. Gather them all before starting your return.
Step 2: Review for Accuracy
Check each form carefully:
- Are the proceeds amounts correct?
- If basis is reported, does it match your records?
- Are any transactions missing?
- Are dates accurate?
If you find errors: Contact the broker immediately to request a corrected form.
Step 3: Report on Form 8949
Each transaction from your 1099-DA gets reported on Form 8949 (Sales and Other Dispositions of Capital Assets):
| Column | Information | From 1099-DA |
|---|---|---|
| (a) Description | ”2.5 Bitcoin (BTC)“ | Box 1b + 1c |
| (b) Date acquired | 05/15/2024 | Box 1d |
| (c) Date sold | 03/20/2025 | Box 1e |
| (d) Proceeds | $25,000 | Box 1f |
| (e) Cost basis | $20,000 | Box 1g (or your records) |
| (f) Adjustment code | Various | See “Applicable checkbox” |
| (g) Adjustment | If needed | Wash sales, etc. |
| (h) Gain or loss | $5,000 | (d) minus (e) |
Step 4: Separate Short-Term and Long-Term
Use the “Applicable checkbox on Form 8949” code from your 1099-DA:
| Code | Meaning | Form 8949 Part |
|---|---|---|
| G | Short-term, basis reported to IRS | Part I, Box A |
| H | Short-term, basis NOT reported to IRS | Part I, Box B |
| J | Long-term, basis reported to IRS | Part II, Box D |
| K | Long-term, basis NOT reported to IRS | Part II, Box E |
| Y | Unknown holding period | Use Part I, Box C or Part II, Box F |
Step 5: Transfer to Schedule D
After completing Form 8949, transfer the totals to Schedule D (Capital Gains and Losses):
- Short-term gains/losses → Part I of Schedule D
- Long-term gains/losses → Part II of Schedule D
- Net capital gain or loss → Line 16 (flows to Form 1040)
Important Deadlines
For 2025 Transactions
| Date | Deadline |
|---|---|
| January 31, 2026 | Brokers must send 1099-DA to recipients |
| January 31, 2026 | Brokers must file 1099-DA with IRS |
| March 16, 2026 | Tax information statements to trust interest holders (WHFITs) |
| April 15, 2026 | Individual tax return deadline (report crypto gains/losses) |
| October 15, 2026 | Extended deadline (with valid extension) |
Didn’t Receive Your 1099-DA?
If you haven’t received a 1099-DA by mid-February:
- Check your exchange’s tax document portal
- Contact the exchange’s support
- Use your own transaction records to report
- Report all sales even without the form
Remember: You must report all taxable transactions whether or not you receive a 1099-DA.
Common Questions
Do I still need to report crypto if I don’t get a 1099-DA?
Yes. You must report all cryptocurrency sales, regardless of whether you receive a 1099-DA. This includes:
- Sales on non-U.S. exchanges
- DeFi transactions
- Peer-to-peer sales
- Self-custody wallet transactions
The IRS requires you to answer “Yes” or “No” on your Form 1040 to the digital asset question: “At any time during 2025, did you receive, sell, exchange, or otherwise dispose of any financial interest in any digital asset?”
What if my basis isn’t reported?
For 2025, brokers aren’t required to report cost basis. If Box 1g is blank:
- Use your own records to determine basis
- Check your exchange’s transaction history
- Use crypto tax software to calculate
- Report accurately on Form 8949
The burden is on you to prove your basis if audited.
What if I transferred crypto between exchanges?
Transfers between your own wallets or accounts are not taxable events and shouldn’t generate a 1099-DA. However, be aware:
- The receiving exchange may not know your original purchase price
- You’ll need to track basis yourself
- Box 12a/12b may show transfer-in information
Are crypto-to-crypto trades taxable?
Yes. Every trade of one crypto for another is a taxable event. For example:
- Trading Bitcoin for Ethereum triggers a sale of Bitcoin
- You must calculate gain/loss based on Bitcoin’s value at the time
- The Ethereum’s basis becomes its fair market value when received
What about lost or stolen crypto?
Unfortunately, the IRS largely eliminated personal casualty loss deductions. Losses from exchange hacks, scams, or lost wallet keys typically cannot be deducted unless they’re connected to a federally declared disaster.
Do I need to report purchases?
No. Simply buying cryptocurrency with USD (or other fiat) is not a taxable event. You won’t receive a 1099-DA for purchases—only for sales, exchanges, or disposals.
Backup Withholding
In some cases, brokers may withhold 24% of your proceeds:
When Backup Withholding Applies
- You haven’t provided your taxpayer ID (SSN/EIN) to the broker
- The IRS notified the broker that your TIN is incorrect
- You’re subject to backup withholding for underreporting
If Tax Was Withheld
- The withheld amount appears in Box 4
- Claim this as a payment on your tax return
- It’s applied against your total tax liability
Note: The IRS provided transitional relief from backup withholding for certain 2025 digital asset sales. Most taxpayers won’t see withholding on their 2025 forms.
Record-Keeping Tips
Good records are essential for crypto taxes. Maintain:
Transaction Records
- Date and time of every purchase
- Amount of crypto acquired
- Price paid (in USD)
- Exchange or platform used
- Wallet addresses involved
Sale Records
- Date and time of every sale
- Amount of crypto sold
- Proceeds received (in USD)
- Fees paid
- Exchange or platform used
Supporting Documentation
- Screenshots of transactions
- Exchange confirmation emails
- Exported transaction history (CSV files)
- Bank/credit card statements
- 1099-DA forms received
Retention period: Keep crypto records for at least 7 years. The IRS can audit returns for 3 years (6 years if income is substantially underreported), and basis records should be kept until you sell the asset.
Tax Software and Tools
Managing crypto taxes manually can be overwhelming. Consider using specialized crypto tax software:
Features to Look For
- Import transactions from multiple exchanges
- Support for DeFi protocols and NFTs
- Automatic cost basis calculations
- Multiple accounting methods (FIFO, LIFO, HIFO, Specific ID)
- Form 8949 generation
- Integration with tax filing software
Popular Options
Most major crypto tax platforms integrate with exchanges and can import your transaction history directly, making it easier to reconcile with your 1099-DA forms.
Looking Ahead: 2026 and Beyond
What’s Coming
| Change | When |
|---|---|
| Mandatory basis reporting | For covered securities (acquired 2026+) |
| Expanded broker definition | Potentially includes DeFi protocols |
| Enhanced IRS matching | Full comparison of reported vs. filed |
| Reduced penalty relief | Stricter enforcement for errors |
Prepare Now
- Organize existing records — Especially for assets acquired before 2026
- Reconcile exchange histories — Before they become harder to access
- Consider accounting method — Choose FIFO, LIFO, HIFO, or specific identification
- Work with a tax professional — Especially for large or complex holdings
Conclusion
Form 1099-DA marks a new era of transparency in digital asset taxation. The IRS now has visibility into your cryptocurrency transactions just like stocks and securities. Key takeaways:
For 2025 Transactions:
- You’ll receive 1099-DA from U.S. exchanges for all sales
- Cost basis may or may not be reported (voluntary for 2025)
- You must calculate and report gains/losses accurately
- Use Form 8949 and Schedule D to report
Going Forward:
- Keep detailed records of all transactions
- Don’t rely solely on 1099-DA—verify against your own records
- Cost basis becomes mandatory for assets acquired after 2025
- The IRS will match reported transactions to your return
Digital asset taxation is no longer optional or obscure. With 1099-DA reporting now in place, accurate crypto tax compliance is more important than ever.
Ready to Report Your Digital Asset Transactions?
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Related Resources
Last updated: February 23, 2026
Reviewed by Jennifer Adams, Senior Tax Advisor
Updated with 2025-2026 IRS digital asset reporting requirements
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