What's a 1099-DA? The new tax form crypto traders need to know

For years, crypto taxes ran on an honor system of sorts: you were required to report your gains, but exchanges weren't required to tell the IRS what you'd done. That era is over. Form 1099-DA is the new information return that brings crypto reporting in line with stocks and if you traded digital assets through a US exchange, you're now part of it.

The form is mostly good news: clearer rules and less ambiguity. But it comes with a catch that trips people up, and filing straight from it can lead you to overpay your taxes. Here's everything a crypto trader needs to understand.

What Form 1099-DA actually is

Form 1099-DA officially "Digital Asset Proceeds From Broker Transactions" is a new IRS information return for reporting sales and exchanges of digital assets. The simplest way to think of it: it's the crypto equivalent of the Form 1099-B that stock investors have received for decades.

Crucially, it's not a form you fill out. Your digital asset broker prepares it, sends a copy to you, and files another copy with the IRS. So when this form lands in your inbox or mailbox, it means the IRS already has the same information. It exists because of the Infrastructure Investment and Jobs Act of 2021, with the detailed rules finalized by the IRS under the broker regulations released in 2024.

Who sends it and who gets it

The form comes from brokers, a term the regulations define broadly. That includes custodial crypto exchanges and trading platforms (Coinbase, Kraken, Gemini, Robinhood, and the like), certain digital asset payment processors, hosted (custodial) wallet providers, and digital asset kiosks such as crypto ATMs.

You'll receive a 1099-DA if you sold, exchanged, or otherwise disposed of digital assets through one of these custodial brokers during the tax year. "Digital assets" here is wide-reaching it covers cryptocurrencies, stablecoins, and NFTs. Note the emphasis on custodial: activity in your own self-custody wallets and much of DeFi sits outside what these brokers can see and report, which becomes important below.

What it reports

The form captures transaction-level data about your disposals similar in spirit to a 1099-B. Depending on the year and the asset, that can include:

• Gross proceeds what you received from each sale or exchange.
• Cost basis (phasing in) what you originally paid, used to calculate gain or loss.
• Acquisition and disposal dates and, eventually, gain/loss details for covered assets.

That word "phasing in" is doing a lot of work, and it's the key to understanding the form's quirks. The IRS deliberately rolled this out in stages.

The phase-in timeline

The reporting requirements expand over two tax years, which is why your first 1099-DA looks different from the ones you'll get later:

In other words, the requirement applies to transactions made on or after January 1, 2025, with brokers reporting only gross proceeds that first year. Cost basis reporting kicks in for transactions on or after January 1, 2026, and only for "covered" assets those both acquired and sold within the same broker account after that date. The first forms that include basis data therefore arrive in early 2027.

Why your first 1099-DA is often incomplete

Here's the catch that matters most. For the 2025 tax year, your 1099-DA typically shows gross proceeds but no cost basis. On its own, gross proceeds make your activity look far bigger than your actual taxable gain because tax is owed only on the difference between what you sold for and what you paid.

Imagine you bought Bitcoin for $40,000 and later sold it for $48,000. Your taxable gain is $8,000. But a 1099-DA reporting gross proceeds only would show $48,000, with no record of your $40,000 basis. File straight from that number and you could appear to owe tax on the full $48,000 six times your real gain.

The gap is even wider for assets you bought before 2026 or moved between platforms. Brokers generally can't see what you paid on another exchange or in a self-custody wallet, so transfers, older holdings, and DeFi activity leave basis "gaps" the form simply can't fill.

What this means for you as a trader

The bigger picture is that the IRS now receives a direct feed of your disposals. That closes the old information gap and makes accurate self-reporting more important than ever. The compliance risk isn't really "forgetting to report crypto" anymore it's mismatches: when the broker's figures and the numbers on your return don't line up, you're more likely to get an automated notice or attract scrutiny.

So the form raises the stakes in both directions. Report too little and you'll mismatch the IRS's copy. Report straight from an incomplete form and you'll overpay. The way through is the same either way: reconcile the form against your own complete records.

No form? You still have to report

One common misconception is that no 1099-DA means no obligation. That's false. Your duty to report taxable crypto transactions exists whether or not you receive a form. If you used a platform that didn't issue one, transacted in self-custody, or simply never got the document, you're still responsible for reporting your gains, losses, and income accurately.

The 1099-DA is a reporting tool layered on top of your existing obligations it doesn't create or replace them. Treat it as a cross-check, not as permission to skip anything it doesn't cover.

What to do about it

Practically, here's how to handle the new form without overpaying or mismatching:

1. Don't file from the 1099-DA alone. Use it as a reference, not as your finished numbers.
2. Reconcile it against your own records from every exchange and wallet, so your cost basis is complete and correct.
3. Calculate your real gains and losses, then report them on Form 8949 and Schedule D as usual.
4. Keep meticulous records dates, prices, fees, and transaction IDs in anticipation of IRS matching.
5. Mind transfers and pre-2026 holdings, where basis is most likely missing from the form.

How CoinTracker helps with the 1099-DA

This is precisely the problem crypto tax software is built to solve. By connecting all your exchanges and wallets, CoinTracker reconstructs your complete cost basis across every account including the older holdings and cross-platform transfers a single broker can't see and reconciles it against the proceeds reported on your forms.

The result is a return based on your actual gains rather than inflated gross proceeds, with IRS-ready Form 8949 and Schedule D you can file or hand to your accountant. CoinTracker also offers tooling specifically for managing 1099-DA forms from connected exchanges, so the figures you file stay consistent with what's being reported about you which is exactly how you avoid the mismatch notices the new regime makes more likely.

Frequently asked questions

Do I fill out Form 1099-DA myself? No. Your broker prepares and sends it to you and the IRS. You use its information to help complete your own return.

Why is the cost basis blank on my 2025 form? Because brokers were only required to report gross proceeds for 2025. Cost basis reporting phases in for 2026 transactions.

Does the form calculate my taxes? No. It reports proceeds (and later basis), but you still calculate your gains and losses and report them on Form 8949 and Schedule D.

What if the numbers look too high? Gross-proceeds-only reporting can look alarming. Your taxable gain is proceeds minus cost basis supply your basis and the real figure is usually far smaller.

I didn't get a 1099-DA. Am I off the hook? No. You must still report taxable crypto activity regardless of whether a form was issued.

Does it cover my DeFi and self-custody activity? Generally not the form comes from custodial brokers. Activity outside their view is still your responsibility to track and report.

The bottom line

Form 1099-DA is the most significant change to crypto tax reporting in years, and on balance it's a step toward clarity: standardized, broker-issued statements that mirror how stocks have long been reported. But the phased rollout means your early forms are incomplete gross proceeds without the cost basis needed to compute what you actually owe.

The takeaway for every crypto trader is simple. The 1099-DA is a starting point, not a finished tax return. Reconcile it against your own complete records, report your real gains on Form 8949 and Schedule D, and keep good documentation. Do that ideally with software that tracks everything year-round and the new form becomes what it was meant to be: a help, not a headache.