Form 1099-DA and the New Digital Asset Broker Reporting Rules

The 2026 filing season is the first time many taxpayers will receive Form 1099-DA. Custodial digital-asset brokers generally must report gross proceeds from reportable sales and exchanges occurring during calendar year 2025.

The form does not create a new tax on cryptocurrency. Sales, exchanges, and other taxable dispositions were already reportable. The change gives the IRS standardized third-party information that can be matched against the taxpayer's return.

Who Is Generally Required to Report

The initial rules generally apply to custodial brokers such as centralized exchanges, hosted-wallet providers, and certain digital-asset payment processors that effect transactions for customers. The reporting rules for decentralized or noncustodial participants have developed separately, so taxpayers should not assume that the absence of a form means a transaction is nontaxable.

2025 Transactions: Gross Proceeds, Usually Without Broker-Reported Basis

For reportable transactions during 2025, Form 1099-DA generally focuses on gross proceeds. The broker may not report the taxpayer's cost basis, particularly when assets were acquired elsewhere or transferred into the platform.

Gross proceeds are not the same as taxable gain. Taxable gain or loss generally depends on the amount realized, adjusted basis, transaction costs, holding period, and the character of the asset. A taxpayer should not report the entire gross-proceeds amount as income without completing that calculation.

2026 Transactions: Basis Reporting Begins for Certain Covered Assets

For certain digital assets acquired on or after January 1, 2026 and held by the reporting broker, basis reporting begins to phase in. Assets acquired before that date or transferred from another wallet or platform may remain noncovered, meaning the broker may report proceeds without reporting basis.

Taxpayers therefore still need independent records showing acquisition dates, purchase prices, fees, transfers between wallets, and the specific units disposed of. A broker's basis information may be incomplete when the broker did not have the full transaction history.

Transfers Are Not Automatically Sales

Moving digital assets between wallets or accounts owned by the same taxpayer is generally not a taxable sale by itself. However, the taxpayer must be able to document that ownership did not change. Poor transfer records can cause duplicated proceeds, missing basis, or mismatches between broker statements and the return.

How to Reconcile Form 1099-DA

Compare every Form 1099-DA with the underlying exchange history and wallet records. Confirm that proceeds were not duplicated, transfers were not treated as dispositions, basis is supported, and all taxable transactions are included even when no form was issued.

An incorrect form should generally be raised with the issuing broker. The taxpayer remains responsible for filing an accurate return and retaining records that explain any difference between the information return and the tax reporting.

Digital-asset reporting depends on the transaction, the type of asset, and the broker's information. This information is educational and is not a substitute for advice based on a taxpayer's complete records.