What Is Form 1099-DA? The New Crypto Tax Form Explained
Quick Answer
Form 1099-DA is the IRS's new tax form for crypto transactions. Starting in 2025, crypto brokers like Coinbase and Kraken must report your crypto sales to the IRS using this form. It works just like the 1099-B form that stock brokers use. You'll receive a 1099-DA if you sold, traded, or disposed of cryptocurrency on a major exchange.
What Is Form 1099-DA?
Form 1099-DA is the IRS's official form for reporting digital asset transactions. Finalized in 2024, it represents the biggest regulatory change in crypto taxes in over a decade.
Think of it this way: when you sell stocks, your broker sends you and the IRS a Form 1099-B showing your proceeds and cost basis. For crypto, Form 1099-DA does the same thing. It reports the gross proceeds from your crypto sales and, starting in 2026, the cost basis of those sales.
The form itself is straightforward. It has boxes for the asset sold, the date of sale, the proceeds, and eventually the cost basis. The IRS uses this information to match against what you report on your own tax return (Schedule D). If there's a mismatch, the IRS notices.
Who Sends 1099-DA Forms?
Not every crypto transaction triggers a 1099-DA. Only brokers and exchanges that meet IRS requirements must send them.
This includes the major centralized exchanges like Coinbase, Kraken, Gemini, Kraken, and others. If you trade on these platforms, you'll receive a 1099-DA.
However, 1099-DAs are NOT sent for:
- Private wallets and self-custody: If you self-custody your crypto, no broker can report it to the IRS.
- Decentralized exchanges (DEXs): Currently, most DEXs are not required to issue 1099-DAs.
- Non-USD pairs: Some brokers only report when the transaction involves USD.
- Staking or mining rewards: These fall under different rules (usually 1099-NEC or 1099-MISC).
The key requirement: the exchange must be registered with FinCEN as a money services business and have a regulatory presence in the U.S.
What Information Is on a 1099-DA?
A 1099-DA contains the following key information:
- Box 1: Description of the digital asset (e.g., "Bitcoin")
- Box 2: Date acquired
- Box 3: Date sold or disposed of
- Box 4: Proceeds from sale (what you sold it for)
- Box 5: Cost basis (what you paid for it) - starting in 2026
- Box 6: Whether cost basis was reported
The "proceeds" box is what matters most right now. This is the total amount you received when you sold the crypto, before any fees. If you sold one Bitcoin for $40,000, the proceeds box shows $40,000.
The cost basis section is brand new. Many brokers didn't track this information before, especially for crypto transferred into the exchange from external wallets. This is why some people receive 1099-DAs with $0 cost basis, even though they paid something for the crypto. We'll address this in detail below.
When Will You Receive Your 1099-DA?
You should receive your 1099-DA by January 31 of the year following the tax year in which you made the transaction.
So for the 2025 tax year, look for your 1099-DAs by January 31, 2026. Your broker will send you a copy, and they'll send a copy to the IRS at the same time.
The IRS also matches your Social Security number or Tax ID to the 1099-DA they receive from the broker. If you don't report the same information on your tax return, the IRS notices the discrepancy.
What to Do When You Get a 1099-DA
Here's the step-by-step process:
1. Verify the information is correct. Check the asset, dates, and proceeds. If your exchange has a transaction history, cross-reference it against the 1099-DA. Look for missing sales, incorrect dates, or wrong amounts.
2. Check the cost basis. For tax year 2025, cost basis may be blank or show $0. This is normal if you transferred crypto in from an external wallet. You'll need to find your actual cost basis.
3. Calculate your gain or loss. Take the proceeds (what you sold for) minus the cost basis (what you paid). This is your capital gain or loss.
4. Report on Schedule D. Your gain or loss goes on Schedule D (Capital Gains and Losses) of your tax return. You may also need to complete Form 8949 (Sales of Capital Assets).
5. Use crypto tax software. The fastest way to do this is to connect your exchange to a crypto tax platform. Software like FastCryptoTax automatically imports your transactions, cross-references your 1099-DA, and generates your Schedule D and Form 8949 for you.
Does a 1099-DA Mean You Owe Taxes?
No, receiving a 1099-DA does not automatically mean you owe taxes. It depends on your cost basis and the price you sold at.
If you sold crypto for less than you paid (a loss), you may not owe taxes on that transaction. You might even be able to use the loss to offset other gains.
If you sold for more than you paid (a gain), then yes, you owe income tax on that gain. The amount depends on how long you held the crypto. Short-term gains (held less than one year) are taxed as ordinary income. Long-term gains (held over one year) get preferential rates of 0%, 15%, or 20%, depending on your income.
The 1099-DA itself is just the IRS's copy of your transaction. What matters is what you actually report on your tax return.