Reading Form 1099-DA: what brokers report, and what they leave out

Custodial brokers now report crypto sale proceeds to the IRS, with basis added from 2026. Here is how to read the form and tie it to your books.

2026-10-16 · 6 min read

What this means for you: if you sell digital assets through a US custodial broker, the IRS now gets a record of your gross proceeds. Basis reporting begins only with assets bought in that same account from 2026. For most older holdings, the cost basis on your return still has to come from your own records [1][2].

What is reported, and when

Form 1099-DA reports digital asset proceeds from broker transactions. Brokers must report gross proceeds for sales effected on or after January 1, 2025. For 2025 sales, basis reporting was optional, and brokers who volunteered it were protected from penalties [1][2].

From January 1, 2026, brokers must also report basis for covered securities. A digital asset is covered only if it was acquired after 2025 in an account where the broker provided custody and stayed there until the broker sold it. Anything bought before 2026, or transferred in from elsewhere, is noncovered. The broker may leave basis blank for those units [1].

For 2025 forms, statements to recipients were due February 17, 2026. Electronic filing with the IRS was due March 31, 2026 [5]. For 2025 transactions, the IRS said it would not penalize brokers who made a good-faith effort to file and furnish correctly. It also gave transitional relief from backup withholding [2].

The boxes that matter for reconciliation

• Box 1a and 1b: token identifier and asset name. Unregistered tokens show 999999999 [1].
• Box 1c: units sold, to 18 decimal places [1].
• Box 1d and 1e: date acquired (blank when lots span several dates) and date sold [1].
• Box 1f: gross proceeds, already reduced by transaction fees, commissions and transfer taxes on the sale [1].
• Box 1g: cost or other basis. Required for covered securities from 2026 and optional otherwise [1].
• Box 9: checked when the broker flags a sale as a noncovered security [1].
• Box 12a and 12b: units transferred into the custodial account and the transfer-in date [1].
• Form 8949 code: G or J means basis was reported to the IRS. H or K means it was not. Y means the holding period is unknown [1].

The broker's lot method may not match yours. Without a timely instruction from the customer, the broker generally reports the earliest units first. Units transferred in may be treated as acquired on the transfer date unless the broker uses customer-supplied acquisition data [1].

What the form does not cover

• DeFi and non-custodial brokers: the July 2024 final rules cover custodial brokers only [2]. A separate rule for decentralized brokers was published on December 30, 2024. Congress disapproved it under the Congressional Review Act in Public Law 119-5, signed April 10, 2025, so it has no force or effect [3].
• Staking rewards: brokers are told not to report rewards and staking payments on Form 1099-DA [1].
• Certain transaction types: under Notice 2024-57, until further guidance brokers need not report wrapping and unwrapping, liquidity provision, staking, lending, short sales, or notional principal contracts [1][2].
• Many companies: corporations are exempt recipients, so brokers are not required to file for them. The exception is S corporations selling covered securities. Brokers may still choose to file [1].
• Basis on legacy holdings: anything acquired before 2026 or transferred in is noncovered, so box 1g may be empty or voluntary [1].

Wallet-by-wallet basis and Rev. Proc. 2024-28

Since January 1, 2025, basis identification works wallet by wallet and account by account. Specific identification or FIFO now applies to the units in a single wallet or account, not across a pooled universal ledger [4].

Rev. Proc. 2024-28 gave a one-time safe harbor. Taxpayers could reasonably allocate unused basis to the units they held in each wallet or account as of January 1, 2025. A specific-unit allocation had to be finished before the earlier of the first 2025 disposal of that asset or the 2025 return due date. A rule-based global allocation had to be described in your books before January 1, 2025. Every allocation is irrevocable [4]. If you relied on it, keep the allocation schedule with your tax workpapers. If you missed it, the default wallet-level rules apply.

Reconciling the form to your records

• Match each form to one broker account, not to your consolidated position [1].
• Tie proceeds per form to your disposal records by date, asset and units. Then confirm the fee netting in box 1f agrees with how you record fees [1].
• Where box 1g is blank, take basis from your wallet-level lots. Where it is filled, compare it lot by lot and document every difference, such as a lot-method or transfer-in date mismatch [1][4].
• Expect activity with no form at all, such as on-chain swaps, DeFi, staking income and transfers between your own wallets. That activity still belongs on your return [1][3].

What to do

• Collect every 1099-DA by account and log whether basis was reported, using the box 9 and Form 8949 codes [1].
• Keep lot records at wallet and account level, matching the post-2025 identification rules [4].
• Give custodial brokers standing lot-selection instructions if you do not want their default ordering [1].
• Treat the form as a cross-check, not a source of truth. Your ledger must also capture DeFi, staking and transfers that no broker reports [1][3].
• Note whether your entity is an exempt recipient, so a missing form does not surprise anyone at year-end [1].

This article is general information, not tax advice. Rules and relief can change, so check IRS.gov/Form1099DA for updates.

Sources

1. 2025 Instructions for Form 1099-DA, Digital Asset Proceeds From Broker Transactions (Internal Revenue Service)
2. Final regulations and related IRS guidance for reporting by brokers on sales and exchanges of digital assets (Internal Revenue Service)
3. Public Law 119-5 (H.J. Res. 25), congressional disapproval of Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales (US Government Publishing Office (govinfo))
4. Rev. Proc. 2024-28: Guidance for taxpayers to allocate basis in digital assets to wallets or accounts as of January 1, 2025 (Internal Revenue Service)
5. General Instructions for Certain Information Returns (2025) (Internal Revenue Service)

General information for finance teams, current as of publication. Not legal, tax or accounting advice.

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