Form 1099-DA Explained: The New Crypto Broker Form

For years, the defining feature of US crypto tax was that the IRS had almost no independent record of what you did. That is over. Form 1099-DA, officially titled Digital Asset Proceeds From Broker Transactions, means the agency now receives a parallel set of numbers from your exchange, and the interesting question has shifted from what you report to whether what you report matches.

What the form is

Form 1099-DA is an information return filed by brokers to report digital asset proceeds from broker transactions, sent both to you and to the IRS. It is the digital asset counterpart to the 1099-B that has covered securities for decades.

The IRS's digital assets page sets out the phase-in in two steps. Brokers must report gross proceeds for transactions effected on or after 1 January 2025. Brokers must report basis on certain transactions effected on or after 1 January 2026. Two transitional relief notices, Notice 2024-56 and Notice 2024-57, accompany the regime.

That two step structure is the single most important thing to understand about the form, and it is where nearly all of the practical trouble lives.

Why the proceeds figure is not your gain

A 1099-DA showing 400,000 dollars of gross proceeds does not mean you made 400,000 dollars. It means 400,000 dollars of value left the account through dispositions. Your gain is proceeds minus your cost basis, which for the first phase of the regime is a number the broker was not required to give you.

This matters because the IRS receives the proceeds figure whether or not it receives the basis figure. A taxpayer who ignores a 1099-DA because "I lost money on all of that" has left the agency holding a large unexplained number with nothing on the return to match it to. The mismatch, not the underlying tax, is what generates the notice.

Why the basis box may be wrong even when it is filled in

Basis reporting starting for transactions from 2026 does not mean the reported basis will be complete. A broker can only know what it can see. Coins that arrived from a self custody wallet, from another exchange, from a hard fork, from an airdrop, or from mining rewards have a history the broker never observed.

This interacts directly with Revenue Procedure 2024-28, under which you track cost basis per wallet or account rather than pooling everything together. If your own records pool across venues while the broker reports per account, the two will not agree, and you are the one who has to explain the difference.

Receiving no form changes nothing

The IRS states the taxpayer's position plainly: if you have digital asset transactions, you must report them whether or not they result in a taxable gain or loss. Decentralised exchanges, peer to peer trades, self custody activity and non US venues can all produce fully taxable disposals with no form attached to them.

Every Form 1040 carries a digital asset question you must answer yes or no, and it is not conditional on receiving a broker form.

What to do with the form you receive

• Reconcile, do not transcribe. Match each line on the 1099-DA to the corresponding disposal in your own records. The point is to find the ones that do not match.
• Check for transfers counted as sales. Moving coins to your own wallet is not a disposal, but a broker seeing an outbound transfer has limited information about where it went.
• Supply your own basis where the form has none or has it wrong. You report your actual basis. The form is the IRS's copy, not the final word on your numbers.
• Keep the acquisition records that support your figure. If you differ from the broker, the difference has to be evidenced.

Where it lands on the return

Disposals go on Form 8949, split short term and long term, and total onto Schedule D. Short term gains, on assets held one year or less, are taxed at ordinary rates up to 37%. Long term gains are taxed at 0%, 15% or 20% depending on your taxable income and filing status. Losses offset gains, and up to 3,000 dollars of net losses can reduce ordinary income each year with the rest carried forward. Crypto you earned rather than bought is ordinary income at its value on receipt and goes on Schedule 1, or Schedule C if it is a business.

Our guide to crypto and Schedule D covers the summary return, and US crypto tax covers the full picture including which other forms may apply.

General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.