Form 1099-DA Explained

Person reviewing Form 1099-DA with Bitcoin and Ethereum tokens on desk

Form 1099-DA Explained: IRS Crypto Reporting Rules for 2026

byMinutes Crypto/November 5, 2025/inCrypto Blog

🔍 Why This Matters

Starting January 1, 2025, U.S. cryptocurrency exchanges must report your digital-asset sales directly to the IRS using a new form — Form 1099-DA, Digital Asset Proceeds From Broker Transactions.
Your first 1099-DA will arrive by February 15, 2026, covering your 2025 transactions.

This marks a major shift in crypto tax reporting — bringing digital assets closer to the reporting standards long applied to stocks and securities.

📄 What Is Form 1099-DA?

Form 1099-DA is the IRS’s newest tax information form created specifically for digital-asset transactions.
It replaces guesswork with clear data directly from brokers.

Purpose:
To increase tax compliance by giving both taxpayers and the IRS an official record of crypto sales and exchanges.

Who Sends It:
Any entity classified as a broker — mainly U.S.-based centralized exchanges such as Coinbase, Kraken, or Gemini.

Who Receives It:
Anyone who sold or exchanged digital assets through those platforms in 2025.

🧾 What You’ll See on the Form

📊 Information Included	🧠 What It Means
Your name, address, and TIN	Used to match your tax return
Broker/exchange details	Identifies the reporting platform
Digital-asset name & quantity	Example: “1.5 ETH”
Sale date & gross proceeds	Total amount you received
Wallet address & transaction hash	Helps IRS trace blockchain movement

💡 Note: The 2025 form will not include your cost basis. That field becomes mandatory starting 2026 transactions (forms issued in 2027).

⚙️ What Gets Reported — and What Doesn’t

💠 Activity	🧾 Reported on 1099-DA?	⚖️ IRS Treatment
Selling crypto for USD	✅ Yes	Taxable sale
Swapping crypto for another crypto	✅ Yes	Property exchange
Providing/withdrawing liquidity on a CEX	✅ Yes	Capital gain/loss
Buying crypto with USD	❌ No	Purchase, not sale
Moving crypto to your wallet	❌ No	Non-taxable transfer
P2P transactions	❌ No broker → self-report

🧮 Understanding “Cost Basis”

Your cost basis is what you originally paid (in USD) for a digital asset.
When you sell or swap it, your taxable gain/loss = Sale Proceeds − Cost Basis.

For 2025 forms, cost basis will not be reported — you must calculate it yourself.
From 2026 onward, exchanges will start reporting cost basis only for assets bought and sold on the same platform (“covered assets”).
Assets moved in from another exchange or wallet remain “uncovered” — you still supply the basis manually.

⚠️ If you don’t report cost basis, the IRS may treat it as $0 — taxing your entire proceeds as gain.

📬 When You Receive Form 1099-DA (in 2026)

Review for accuracy — confirm your name, amounts, and sale details.
Compare against your personal transaction records.
Report totals on Form 8949 and Schedule D of your tax return.
Correct errors early — request an amended form from the broker if needed.

Keep copies for at least 3 years with supporting records (wallet logs, CSVs, etc.).

🧾 Multiple Platforms?

You’ll likely receive separate 1099-DAs from each exchange.
Aggregate them all before completing your return.
Crypto tax software can simplify this by syncing wallets, importing 1099-DA data, and generating a complete Form 8949 summary.

🔄 2026 and Beyond: Key Changes Ahead

📅 Effective Year	🪙 Change
2025 transactions → 2026 forms	1099-DA reports only gross proceeds
2026 transactions → 2027 forms	Brokers must add cost-basis data
Ongoing	More platforms may be defined as “brokers,” including certain DEXs and NFT marketplaces

🏁 Action Tip: Start reconciling your wallets and exchange history now, not in 2026. Accurate cost basis today avoids overpaying taxes later.

✅ Key Takeaways

🏛️ Form 1099-DA begins with 2025 transactions.

💡 Cost basis reporting starts 2026 onward.
🧾 All sales and swaps on centralized exchanges will be reported to the IRS.
⚖️ DeFi, P2P, and foreign trades remain self-reporting obligations.
📚 Accurate record-keeping is your best protection.

🔗 References

IRS – Digital Assets Frequently Asked Questions

IRS Form 1099-DA Draft & Instructions (2025)

We welcome your feedback, questions and ideas, comment below or email us at hello@minutescrypto.com.

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Disclaimer

The information provided in this article is for general informational purposes only and does not constitute legal, accounting, or tax advice. Tax laws are complex and subject to change, and individual circumstances may vary, often resulting in different tax outcomes than those described under general rules. Readers are strongly encouraged to consult a qualified tax professional or advisor to obtain advice specific to their personal situation. The author and publisher assume no responsibility for any errors, omissions, or outcomes resulting from the use of this information.

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