Form 1099-DA is the information return that U.S. digital asset brokers file with the IRS, and send to customers, for sales and exchanges of crypto and other digital assets. For 2025 sales it shows gross proceeds only. For sales after 2025 it also shows cost basis, though only for "covered" assets acquired in the customer's account at that broker in 2026 or later.
That split is why many 2025 Form 1099-DA statements look like every dollar of proceeds was profit. This guide covers who issues the form, what the boxes mean, the de minimis rules for stablecoins and NFTs, the IRS backup withholding relief for brokers, and how to reconcile the form to Form 8949, with a worked example. Figures and rules are as of October 2026.
Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is the digital asset version of Form 1099-B. The IRS describes it plainly on its Understanding your Form 1099-DA page: brokers use it "to report proceeds from (and in some cases, basis for) digital asset dispositions to you and the IRS."
The form reports dispositions. That page lists the transactions that trigger it when a broker handles them: trading one digital asset for another, selling for dollars or other currency, exchanging digital assets for property, goods or services, and using digital assets to pay broker transaction costs. Income events such as staking rewards are reported elsewhere on the return, which our guide to how staking rewards are taxed covers.
The form also does not decide anyone's tax. The same IRS page states: "Whether or not you receive a Form 1099-DA, you must report all income, gains and losses from digital asset transactions on your federal income tax return." The return is still built from the taxpayer's own records, and the form is the number the IRS will match against.
The broker rules sit under Internal Revenue Code section 6045, as amended by the Infrastructure Investment and Jobs Act. The IRS digital assets page says the final regulations apply to brokers that take possession of the digital assets their customers sell, "including operators of custodial digital asset trading platforms, certain digital asset hosted wallet providers, digital asset kiosks and certain processors of digital asset payments (PDAPs)."
The 2026 Instructions for Form 1099-DA add that "Generally, only a U.S. digital asset broker is required to report on Form 1099-DA." The IRS broker reporting FAQs, added October 30, 2025, apply the rules to specific businesses. A kiosk operator that lets customers sell crypto for cash must file. A custodian that only moves coins to another exchange at the customer's request, without effecting the sale, has no reporting obligation for that transfer.
Three practical points follow from these rules:
Brokers must furnish the customer statement by February 15 of the following year, moved to the next business day when that date falls on a weekend or legal holiday, under Publication 1099. Many exchanges deliver Form 1099-DA inside a combined statement, so it helps to know how to read a 1099 composite.
The IRS digital assets page sets out the phase-in: "Brokers must report gross proceeds for transactions effected on or after Jan. 1, 2025. Brokers must report basis on certain transactions effected on or after Jan. 1, 2026."
For tax year 2025, the forms that arrived in early 2026 therefore show proceeds without required basis. Brokers could report basis voluntarily. Where a broker cannot tell how long the customer held the asset, it enters code Y in the Form 8949 checkbox field, meaning it cannot say whether the sale belongs in short-term box H or long-term box K.
Box 1f proceeds are already reduced by selling costs. The instructions say brokers "must reduce the proceeds by digital asset transaction costs, including transaction fees, commissions, and transfer taxes related to the sale." A taxpayer who also deducts the same fee on Form 8949 would count it twice.
From January 1, 2026, basis reporting is mandatory for covered securities. The 2026 instructions define a covered security as "a digital asset acquired after 2025 for cash, stored-value cards, different digital assets, or any property or services the disposition of which the broker is required to report in an account for which the broker provided custodial services."
Everything else is noncovered. The instructions list, among others:
The transfer-in rule catches many investors. Coins bought on one exchange in 2026 and then moved to a second exchange become noncovered at the second exchange, so the second broker is not required to report their basis. A broker may accept the customer's acquisition records for lot ordering, but the FAQs say it "may not rely on this customer-provided acquisition information to report the customer's basis." Box 8 flags that the broker relied on those records.
For noncovered sales, a broker may report basis voluntarily. If it checks box 9 to mark the asset as noncovered, it is not subject to penalties for getting that voluntary basis wrong. The practical result is that Form 1099-DA will show a mix of reported and unreported basis for years, and lot selection and wallet-level tracking still matter. Our guide to how crypto cost basis is calculated covers those methods.
Brokers may use optional reporting methods for qualifying stablecoins and specified NFTs, and three thresholds apply under the 2026 instructions:
| Category | Threshold per customer per year | Effect |
|---|---|---|
| Designated sales of qualifying stablecoins | Aggregate gross proceeds of $10,000 or less | Broker using the optional method does not report them |
| Qualifying stablecoins above $10,000 | Over $10,000 | Reported in aggregate, one Form 1099-DA per stablecoin type |
| Specified NFTs | Aggregate gross proceeds of $600 or less | Broker using the optional method does not report them |
| PDAP sales (payment processors) | $600 or less | Not reported; above $600, all of that customer's sales are reported |
A qualifying stablecoin must track a single government currency one to one, use an effective stabilization mechanism and be generally accepted as payment by people other than the issuer. A "designated sale" excludes a stablecoin swapped for a different digital asset that is not a qualifying stablecoin, so trading USDC for bitcoin is reported as a regular sale even when stablecoin totals stay under $10,000. The FAQs explain that one off-peg trade does not fail the 3% stabilization test, which looks at consecutive 10-day periods.
For aggregated NFT reporting, first sales by a creator or minter go in box 11c and other NFT sales in box 1f, on separate forms. The tax treatment of NFT sales themselves is covered in our guide to how NFTs are taxed.
Sales below these thresholds are still taxable. The de minimis rules only relieve the broker of filing.
Box 4 of Form 1099-DA shows federal income tax withheld, which for digital assets means backup withholding at 24% where a customer has not given a certified taxpayer identification number. The general mechanics are in our guide to how backup withholding works.
Two IRS notices delay that withholding for digital asset brokers. Notice 2024-56 gave relief for 2025 and waived filing penalties for 2025 forms where brokers make good faith efforts. Notice 2025-33 extended the backup withholding relief another year, stating that withholding "will not be required on any digital asset sale effected by a broker during calendar year 2025 or calendar year 2026."
For 2027, as of October 2026, the relief narrows. Per the IRS digital assets page and Notice 2025-33, a broker can avoid backup withholding for a preexisting customer by submitting the customer's name and TIN to the IRS TIN Matching Program and getting a match. Separate 2027 relief applies to pre-2026 accounts with a non-U.S. address that the broker has not classified as U.S. persons.
The Instructions for Form 8949 state that the form "allows you and the IRS to reconcile amounts that were reported to you and the IRS on Form 1099-B, Form 1099-DA, or Form 1099-S." Digital assets get their own checkboxes, separate from the stock boxes:
| Form 8949 box | Use for |
|---|---|
| G (short-term) / J (long-term) | Form 1099-DA shows basis and box 2 is checked (basis reported to the IRS) |
| H (short-term) / K (long-term) | Form 1099-DA has no basis, or basis was not reported to the IRS |
| I (short-term) / L (long-term) | No Form 1099-DA was received |
The Form 8949 instructions add that "Digital asset transactions should not be reported using box C or F." Four rules carry most of the reconciliation work:
Where a 2025 form shows code Y, the taxpayer's records decide whether the sale belongs in box H or box K. If a Form 1099-DA is wrong, the IRS tells taxpayers to request a corrected form from the issuer and adds: "Don't contact the IRS. We can't correct your Form 1099-DA." Totals then flow to Schedule D, covered in our guide to Schedule D and Form 8949.
Maria (an illustrative client with round-number prices) holds her crypto at one U.S. exchange. During 2026 she:
Assuming the exchange uses the optional stablecoin method and checks box 9 for the older bitcoin, her 2026 Form 1099-DA, due to her by mid-February 2027, would show:
| Sale | Form 1099-DA proceeds | Basis on form | Form 8949 box | Basis used | Gain |
|---|---|---|---|---|---|
| 1.5 BTC (noncovered, bought 2022) | $150,000 | Blank, box 9 checked | K | $45,000 from her records | $105,000 long-term |
| 2 ETH (covered, bought 2026) | $5,200 | $4,000, box 2 checked | G | $4,000 | $1,200 short-term |
| USDC designated sales | Not reported ($8,000 is under $10,000) | n/a | I | $8,000 | $0 |
| Total | $155,200 | $57,000 | $106,200 |
Her Form 8949 proceeds total $163,200, which is $8,000 more than the Form 1099-DA total. The difference is the stablecoin sales, so the gap is explained. If Maria had left the bitcoin basis blank and treated it as zero, her reported gain would be $151,200, which overstates her real gain of $106,200 by $45,000. The ETH line matches the broker's figures with no adjustment, so under Exception 1 in the Form 8949 instructions it may go straight to Schedule D.
When will I receive Form 1099-DA? Brokers must furnish Form 1099-DA by February 15 of the year after the sales, or the next business day if that date falls on a weekend or legal holiday. For 2025 sales, the IRS listed February 17, 2026 as the due date. For 2026 sales, February 15, 2027 is Presidents Day, a federal holiday, so the date moves to the next business day. Many exchanges include it in a combined tax statement.
Does Form 1099-DA report cost basis? For 2025 sales, brokers were not required to report basis. For sales after 2025, they must report basis for covered assets, which are assets the broker acquired for the customer in its custody after 2025. Assets bought before 2026 or transferred in from another wallet or exchange are noncovered, and their basis may be blank.
Do I owe tax on crypto sales that are not on a Form 1099-DA? Yes. The IRS states that you must report all income, gains and losses from digital asset transactions whether or not you receive the form. DeFi swaps, trades on foreign exchanges and stablecoin sales under the $10,000 de minimis threshold all still go on Form 8949, using box I or box L.
Will my exchange withhold tax from my crypto sales? Under Notice 2025-33, brokers are not required to backup withhold on digital asset sales in 2025 or 2026. Relief for 2027 is narrower, so customers should give their exchange a certified TIN on Form W-9 before then.
What should I do if my Form 1099-DA is wrong? Ask the broker named in the "Filer" box for a corrected form and keep the correspondence. The IRS cannot correct the form. If basis reported to the IRS is wrong, report it as shown and enter the correction in column (g) of Form 8949.
Madras Accountancy supports U.S. CPA firms and their clients with crypto transaction reconciliation, cost basis workpapers, Form 8949 and Schedule D preparation, and review of broker statements against client records. For business holders, our overview of business cryptocurrency tax implications and our guide to cryptocurrency accounting under ASU 2023-08 cover the book side. To discuss your firm's digital asset workload, contact our team.
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