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Form 1099-DA Explained

Everything crypto investors need to know about Form 1099-DA — the new IRS reporting form for digital assets. What it covers, what it doesn't, and what you still need to track yourself.

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Updated March 2026 for the 2025 tax year
Tax Year 2025

What Is Form 1099-DA?

Form 1099-DA (Digital Asset Proceeds from Broker Transactions) is a tax document that crypto exchanges and brokers must file with the IRS and send to you. It reports the gross proceeds from your crypto sales and dispositions during the tax year.

Think of it like the 1099-B that stock brokers send — but for crypto. The IRS uses it to verify that you are reporting your crypto gains and losses accurately.

Important: 1099-DA does not replace your records

The form only reports what one exchange knows. It often has incomplete or missing cost basis, cannot track cross-exchange transfers, and may contain errors. You are still responsible for accurate reporting on your tax return.

What 1099-DA Reports

  • Gross proceeds from crypto sales
  • Crypto-to-crypto swap proceeds
  • Date of each disposition
  • Type of digital asset sold
  • Amount/quantity sold
  • Cost basis (when available — often missing)

What 1099-DA Does NOT Report

  • Transactions on other exchanges
  • DeFi activity (swaps, lending, LPs)
  • Wallet-to-wallet transfers you made
  • Cost basis for transferred-in assets
  • Staking/mining rewards (use 1099-MISC)
  • Airdrops, forks, or gifted crypto

The Cost Basis Problem

The biggest issue with 1099-DA is missing or incorrect cost basis. Here is why:

Transferred-in crypto has no basis

If you bought ETH on Coinbase and transferred it to Kraken, then sold it on Kraken — Kraken has no idea what you originally paid. Your 1099-DA from Kraken will show the proceeds but may list cost basis as 'unknown' or $0.

Cross-exchange history is invisible

Each exchange only sees its own transactions. If you used 3 exchanges over 5 years, no single 1099-DA captures your full picture.

DeFi activity is off-chain to brokers

Decentralized exchange swaps, liquidity pool deposits, yield farming — none of this appears on a centralized exchange's 1099-DA.

Early years may have no records

If you bought crypto before broker reporting was required and still hold it, establishing cost basis falls entirely on you.

What You Should Do

1

Keep your own records

Maintain a personal log of every crypto purchase, sale, swap, transfer, and fee. Include dates, amounts, prices, and platform/wallet used. Do not rely solely on 1099-DA.

2

Use crypto tax software

Tools like Koinly, CoinLedger, or TokenTax can import data from all your exchanges and wallets, calculate accurate cost basis across platforms, and generate complete tax reports — filling in the gaps that 1099-DA misses.

3

Review your 1099-DA carefully

Compare the form against your own records. Check for missing transactions, double-counted transfers, and incorrect cost basis. Contact the exchange to request corrections if needed.

4

Report accurate numbers

If your 1099-DA is inaccurate, use your own records and tax software to report the correct figures on your tax return. Attach explanations if your numbers differ from the form.

5

Consult a tax professional if needed

For complex situations (large gains, DeFi activity, multiple years of activity), consider working with a CPA or tax attorney who specializes in cryptocurrency.

Fill the gaps in your 1099-DA with crypto tax software

Crypto tax software imports your full transaction history from every exchange and wallet, calculates accurate cost basis, and generates complete tax reports — even when your 1099-DA is incomplete.

Koinly

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CoinLedger

Simplest interface — great for beginners

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Crypto Recordkeeping Checklist

Keep track of these for every crypto transaction, regardless of what your 1099-DA shows.

Date of transaction
Type (buy, sell, swap, transfer, reward)
Asset name and amount
Fair market value at time of transaction
Cost basis (what you originally paid)
Gain or loss
Fees paid (exchange, gas, withdrawal)
Platform or wallet used
Transaction ID / hash
Holding period (short-term vs long-term)

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Frequently Asked Questions

What is Form 1099-DA?+
Form 1099-DA (Digital Asset Proceeds) is a tax form that crypto exchanges and brokers are now required to send to the IRS and to you. It reports the proceeds (sale price) from your crypto dispositions — sales, swaps, and certain other transactions. It is similar to Form 1099-B that stock brokers send, but specific to digital assets.
When did 1099-DA reporting start?+
The IRS finalized rules requiring 1099-DA reporting beginning with tax year 2025 (filed in early 2026). Some exchanges sent preliminary reports earlier, but 2025 is the first year with mandatory broker reporting for crypto under the new rules.
Will my 1099-DA show my cost basis?+
Not necessarily. For the initial years, many exchanges will only report gross proceeds (the amount you received from selling). Cost basis reporting is being phased in. Even when cost basis is reported, it only covers assets purchased on that specific exchange — transfers in from other exchanges or wallets will typically show unknown cost basis. You are responsible for maintaining your own cost basis records.
What if my 1099-DA is wrong?+
Contact the exchange that issued the form and request a corrected version. Common errors include duplicate transactions, missing transfers (counted as sales), and incorrect cost basis. If you cannot get a corrected form, you can report the correct figures on your tax return and include an explanation. Consider using crypto tax software to generate accurate reports from your raw transaction data.
Do I still need to track my own transactions?+
Yes, absolutely. The 1099-DA does not replace your personal recordkeeping. It typically only covers one exchange, may not include cost basis, and cannot track transfers between your own wallets. You should keep records of every purchase, sale, swap, transfer, and fee across all platforms and wallets you use.
What transactions are reported on 1099-DA?+
Sales of crypto for fiat (USD), crypto-to-crypto swaps, and certain other dispositions. Simple purchases (buying crypto with USD) and transfers between your own wallets are generally NOT reported as dispositions, though they may appear on the form for informational purposes. Staking rewards and mining income are typically reported on 1099-MISC, not 1099-DA.
What if I used multiple exchanges?+
You will receive a separate 1099-DA from each exchange where you had reportable activity. You need to reconcile all of them. Transfers between exchanges are not taxable events, but exchanges may report them if they cannot distinguish a transfer from a sale. This is one of the main reasons you need your own comprehensive records.
Can crypto tax software help with 1099-DA issues?+
Yes. Crypto tax software like Koinly, CoinLedger, or TokenTax can import your transaction history from all exchanges and wallets, calculate accurate cost basis across platforms, and generate complete tax reports. This is especially useful when your 1099-DA has missing or incorrect cost basis.

This content is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for advice specific to your situation.

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