Crypto Taxes in 2026: What Form 1099-DA Means for You

If you bought, sold, or traded cryptocurrency through an exchange, you may have already received a new tax form you haven’t seen before: Form 1099-DA. Here’s what it is, what it does and doesn’t tell the IRS yet, and what to do about it.

What Form 1099-DA Is

Form 1099-DA, “Digital Asset Proceeds From Broker Transactions,” is the IRS’s dedicated information return for crypto and other digital asset sales handled by a broker — custodial exchanges, certain hosted wallet providers, and similar platforms. It works like a brokerage’s 1099-B for stocks: the broker reports your transactions to both you and the IRS.

Why the IRS Created It

Before 1099-DA, crypto exchanges weren’t required to report sales to the IRS the way stock brokerages have long been required to. That gap made it easy — intentionally or not — for crypto gains to go unreported. Form 1099-DA brings digital assets in line with how other investments are already tracked.

What’s Reported for 2025 vs. 2026

The form is phasing in gradually, not all at once:

• 2025 transactions (reported on forms sent out in early 2026): brokers report gross proceeds only — what you received when you sold or exchanged an asset. Cost basis (what you originally paid) isn’t required on these first forms.
• 2026 transactions (reported on forms sent out in early 2027): brokers begin reporting cost basis as well, but only for “covered” digital assets — generally ones you bought on or after January 1, 2026 and held at the same broker the whole time.

That means for a while, your 1099-DA may show proceeds without basis, or basis for some assets but not others bought earlier. That’s expected during this transition, not necessarily a sign something is wrong with your own taxes — but it does mean you can’t always rely on the form alone to calculate your gain or loss.

The Digital Asset Question on Your 1040

Form 1040 asks every filer a yes-or-no question: whether, during the year, you received a digital asset as payment or a reward, or sold, exchanged, or otherwise disposed of one. This question applies whether or not you got a 1099-DA, and whether your activity was large or small. Answer it honestly — the IRS treats a false “no” far more seriously than ordinary unreported income.

Common Taxable Events

Generally, these count as a taxable event:

• Selling crypto for U.S. dollars.
• Trading one cryptocurrency for another (yes, even a crypto-to-crypto swap).
• Using crypto to pay for goods or services.
• Receiving crypto as payment for work, or as a reward from staking or mining.
• Receiving crypto from certain airdrops.

What’s Usually Not Taxable

A couple of common situations don’t trigger a taxable event by themselves:

• Buying crypto with cash and simply holding it.
• Moving your own crypto between wallets or accounts you control, with no sale or exchange involved.

Holding isn’t the taxable moment — disposing of the asset is.

If Your 1099-DA Looks Incomplete or Wrong

Because basis reporting is still phasing in, it’s common for a 1099-DA to understate what you actually paid for an asset, which can make a gain look bigger than it really is — or hide a loss entirely. If that happens:

• Pull your own trade history and purchase records from the exchange or wallet.
• Don’t assume the form is complete just because it arrived with IRS-looking formatting.
• Report your actual, documented cost basis on your return, even if it differs from what the form shows.

Recordkeeping Checklist

Keep these for every digital asset account you use:

• Trade confirmations or transaction histories showing dates, amounts, and prices.
• Records of what you originally paid for each asset (cost basis), especially for anything bought before 2026.
• Records of any crypto received as income, staking rewards, or airdrops, with its fair market value on the date received.
• Any 1099-DA forms you receive, even if they look incomplete.

Get Help Before You File

Crypto reporting is one of the areas where good records matter more than ever, and a 1099-DA — however helpful — won’t do all the work for you yet. Our tax preparation service includes digital asset reporting, and our bookkeeping service can help you build cleaner records going forward. If you’d rather talk it through first, book a free consultation and bring whatever forms or exchange statements you have.