Form 1099-DA: Digital Asset Tax Reporting
Understand IRS Form 1099-DA for cryptocurrency, NFT, and digital asset transactions. New reporting requirement for 2025 tax year — brokers must now report sales to the IRS.
What is Form 1099-DA?
The new IRS form for reporting cryptocurrency and digital asset transactions
Form 1099-DA (Digital Asset Proceeds From Broker Transactions) is a brand-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 for stock 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. This marks the end of the "honor system" for crypto tax reporting.
What Are Digital Assets?
The types of assets reported on Form 1099-DA
Included on 1099-DA:
- Cryptocurrencies — Bitcoin, Ethereum, Solana, etc.
- Stablecoins — USDC, USDT, DAI, and other pegged tokens
- NFTs — Non-fungible tokens, digital art, collectibles
- Tokenized securities — Traditional assets on blockchain
- Wrapped tokens — Cross-chain asset representations
- DeFi token swaps through centralized exchanges
NOT on 1099-DA:
- Purchases — Buying crypto isn't taxable
- Wallet transfers — Moving between your own wallets
- HODLing — Simply holding crypto
- Mining/staking rewards — Reported as income separately
- Airdrops — Typically ordinary income
- DeFi activities — Currently exempt (pending guidance)
Who Issues and Receives Form 1099-DA?
Understanding the new reporting requirements
Brokers Who Must Issue 1099-DA:
- Centralized exchanges — Coinbase, Kraken, Gemini
- Trading platforms — Robinhood, Cash App
- Custodial services — BitGo, Anchorage
- Bitcoin ATMs/kiosks — Digital asset kiosks
- Payment processors — BitPay, Coinbase Commerce
NOT Required to Report (Currently):
- DeFi protocols — Uniswap, Aave (no broker)
- Self-custody wallets — MetaMask, Ledger
- Peer-to-peer transfers — No intermediary
- Mining pools — Different rules apply
- Hardware wallet makers — Just software/hardware
Important: Even if you don't receive a 1099-DA (e.g., for DeFi trades), you're still required to report all crypto transactions on your tax return. Keep detailed records!
Understanding Your 1099-DA
Key information boxes and what they mean
Box 1a-1b: Digital Asset Identification
- Box 1a: 9-character DTIF code identifying the asset (e.g., "D001BTC00")
- Box 1b: Name of the digital asset (e.g., "Bitcoin", "Ethereum")
- Box 1c: Number of units sold (up to 18 decimal places)
Box 1d-1e: Dates
- Box 1d: Date you acquired the digital asset (may be blank for 2025)
- Box 1e: Date you sold or disposed of the asset
- Used to determine short-term (≤1 year) vs. long-term (>1 year) gain
Box 1f: Proceeds (Most Important!)
- Total amount you received from the sale
- Includes cash, value of other crypto, or services received
- Already reduced by transaction fees and commissions
Box 1g: Cost or Other Basis
- What you originally paid for the digital asset
- For 2025: May be blank — voluntary reporting by broker
- Starting 2026: Required for covered securities
- If blank, you must calculate your own basis
Box 6: Gain or Loss Type
- Short-term: Held 1 year or less (taxed as ordinary income)
- Long-term: Held more than 1 year (lower capital gains rates)
- Ordinary: May apply to certain foreign currency transactions
Box 9: Noncovered Security
- Checked if the asset is a noncovered security
- For 2025, all digital assets are noncovered (basis reporting voluntary)
- Starting 2026, assets purchased through broker become "covered"
2025 vs. 2026 Reporting Requirements
The rules are phasing in over two years
2025 Transactions (Filing in 2026)
- Gross proceeds — Mandatory reporting
- Cost basis — Voluntary (may be blank)
- Acquisition date — Voluntary
- Gain/loss calculation — Your responsibility
- Penalty relief — For basis errors
- All assets — Treated as noncovered securities
2026+ Transactions (Filing in 2027+)
- Gross proceeds — Mandatory reporting
- Cost basis — Mandatory for covered securities
- Acquisition date — Mandatory for covered
- Gain/loss calculation — Broker calculates
- Full penalties — For errors and omissions
- Assets purchased 2026+ — Become covered securities
For 2025: If your 1099-DA shows proceeds but no cost basis, you must use your own records to calculate your actual gain or loss. Don't leave this blank on your tax return!
How to Report 1099-DA on Your Tax Return
Step-by-step guide for Form 8949 and Schedule D
Step 1: Collect All 1099-DA Forms
Gather forms from all exchanges where you sold crypto in 2025. You may have multiple 1099-DAs from different platforms. Check each exchange's tax document section.
Step 2: Verify and Calculate Basis
Check that proceeds (Box 1f) match your records. If cost basis (Box 1g) is blank, use your purchase records to determine what you paid. Calculate: Proceeds - Basis = Gain/Loss.
Step 3: Report on Form 8949
Enter each transaction on Form 8949. Separate short-term (Part I) and long-term (Part II) transactions. Use the applicable checkbox code from your 1099-DA.
Step 4: Transfer to Schedule D
Summarize your Form 8949 totals on Schedule D (Capital Gains and Losses). The net gain or loss flows to your Form 1040.
Transactions NOT on Form 1099-DA
Currently exempt from broker reporting (but may still be taxable!)
Wrapping/Unwrapping Tokens
Converting ETH to WETH or similar wrapping operations. Pending IRS guidance on tax treatment.
Liquidity Pool Transactions
Adding/removing liquidity on DeFi protocols. Complex tax implications — consult a crypto tax professional.
Staking Deposits/Withdrawals
Staking operations themselves aren't sales. However, staking rewards are taxable income when received.
Crypto Lending
Lending platforms like Celsius, BlockFi (pending guidance). Interest earned is typically ordinary income.
Mining & Staking Rewards
Not on 1099-DA. These are ordinary income when received — may appear on 1099-MISC instead.
Airdrops
Free tokens received are ordinary income at fair market value when received. Not broker transactions.
Warning: These transactions not being on 1099-DA doesn't mean they're tax-free! You must still report them on your return. Use crypto tax software to track DeFi activity.
Frequently Asked Questions
Common questions about Form 1099-DA
When will I receive Form 1099-DA?
Cryptocurrency exchanges must send Form 1099-DA to you by January 31, 2026 for 2025 transactions. Check your exchange's tax document portal if you haven't received yours by mid-February. Some exchanges may email you when it's ready.
What if my cost basis isn't on the 1099-DA?
For 2025 transactions, cost basis reporting is voluntary. If Box 1g is blank, you must use your own records — purchase confirmations, exchange transaction history, or crypto tax software — to determine your basis. The burden is on you to prove your basis if audited.
Are crypto-to-crypto trades taxable?
Yes. Every trade of one crypto for another (e.g., Bitcoin for Ethereum) is a taxable event. You must calculate gain/loss based on the fair market value at the time of trade. Both transactions should appear on 1099-DA if through a broker.
What if I traded on a foreign exchange?
Foreign exchanges are generally not required to issue 1099-DA to U.S. customers. However, you must still report all transactions on your tax return. Use your exchange transaction history and crypto tax software to generate the required reports.
Do I still need to report if I don't get a 1099-DA?
Absolutely yes. You must report all cryptocurrency sales on your tax return regardless of whether you receive a 1099-DA. This includes DeFi trades, peer-to-peer sales, and transactions on exchanges that don't issue the form. The IRS requires you to answer "Yes" or "No" to the digital asset question on Form 1040.
What's the difference between covered and noncovered securities?
Covered securities: Assets purchased through a broker after January 1, 2026 — broker must report cost basis. Noncovered securities: Assets purchased before 2026 or transferred in — basis reporting is optional. For 2025, all digital assets are noncovered, so basis may not appear on your 1099-DA.
What about NFTs?
NFT sales through brokers are reported on Form 1099-DA. Brokers can use an optional aggregate reporting method for "specified NFTs" — all sales combined on one form. First sales by creators/minters may be reported separately in Box 11c.
What about lost or stolen crypto?
Unfortunately, the Tax Cuts and Jobs Act eliminated most personal casualty loss deductions. Losses from hacks, scams, or lost wallet keys typically cannot be deducted unless connected to a federally declared disaster. Consult a tax professional for your specific situation.
Need Help With Your Crypto Taxes?
View the official IRS Form 1099-DA and learn how to report your digital asset transactions correctly.
Related Forms
Forms used alongside 1099-DA for crypto tax reporting
About Form 1099-DA
Form 1099-DA (Digital Asset Proceeds From Broker Transactions) is the IRS's new information return for cryptocurrency and digital asset reporting. Introduced for the 2025 tax year, this form requires U.S. digital asset brokers to report sales, exchanges, and disposals of cryptocurrencies, NFTs, stablecoins, and other digital assets to both taxpayers and the IRS.
Before Form 1099-DA, cryptocurrency tax reporting relied largely on the honor system. While taxpayers were always required to report crypto gains, the IRS had limited visibility into actual transactions. This new form creates the same level of transparency for digital assets that has long existed for stocks, bonds, and traditional securities.
The reporting requirements phase in over two years. For 2025 transactions, brokers must report gross proceeds but cost basis is voluntary. Starting with 2026 transactions, brokers must also report cost basis for "covered securities" — digital assets purchased through the broker after January 1, 2026. This phased approach gives both brokers and taxpayers time to adapt their record-keeping systems.
For a comprehensive guide on how to use Form 1099-DA for your tax return, including step-by-step instructions for Form 8949 and Schedule D, see our complete 1099-DA guide for 2026.