US Crypto Tax: What 1099-DA Changes for You

For most of crypto's history, US tax reporting was self-declared. The IRS knew what you told it, plus whatever it obtained through summonses. Form 1099-DA changes the default: the agency now receives a return from brokers listing customer dispositions, and your filing is checked against it automatically.

This is general information about how the reporting regime is structured, not advice on your position. Digital asset tax in the US is fact-specific and the transition rules are intricate; an accountant who has handled crypto returns is worth engaging.

What the form reports

1099-DA covers sales and exchanges of digital assets by customers of brokers. Gross proceeds reporting began for transactions occurring from 2025, with the first forms issued in early 2026. Cost basis reporting phases in for covered securities acquired from 2026, meaning a form may show proceeds without basis for anything you acquired before then or moved in from elsewhere.

Broker in this context covers custodial trading platforms and certain hosted wallet providers. The reporting obligations for decentralised front ends were the subject of separate rulemaking and subsequent legislative action, so the practical position for purely on-chain activity differs from custodial activity — and either way, the underlying tax obligation exists whether or not a form is filed.

The rule that catches people: per-account basis

Cost basis must be tracked per wallet or account, not pooled across everything you own. Guidance issued for the transition allowed taxpayers to allocate existing unused basis across their accounts as of the start of the new regime, and after that point each account stands on its own.

The practical implication is significant. You cannot sell on one platform and claim the basis of coins held on another. Specific identification, if you want to use it, must be made at or before the time of the transaction and in a manner the broker's records support — otherwise the default first-in, first-out applies within that account.

This makes account structure a tax decision. Consolidating a scattered position before selling, or deliberately keeping high-basis and low-basis lots on separate platforms, changes outcomes in ways that were previously invisible.

Where mismatches come from

Four recurring sources, all of which produce a form that disagrees with your actual position.

Transfers in. Move coins from self-custody or another platform and the receiving broker usually does not know what you paid. The form shows proceeds with no basis, and unreconciled that reads as if the entire proceeds were gain.

Transfers out. A withdrawal is not a disposal, but it removes the asset from the platform's records, so its later sale elsewhere has no basis history.

Staking, rewards and airdrops. Income recognised at receipt establishes basis, and platforms vary in how they record it. Rewards taxed as income and later sold at the same value should produce no gain; a form lacking that basis will suggest otherwise.

DeFi activity. Swaps, liquidity provision, wrapping and bridging generate disposals that no broker reports and that most software classifies inconsistently.

In every case, the reconciliation is yours to perform and to document. The form is information the IRS received; your return states what actually happened, and any difference needs support.

What has not changed

The substantive rules are the same as before. Selling for dollars, swapping one token for another, and spending crypto are all dispositions producing capital gain or loss, with the holding period determining short-term or long-term treatment. Staking and mining rewards and most airdrops are ordinary income at fair market value on receipt, which then becomes basis. Moving assets between your own wallets is not taxable.

The basics are covered in crypto taxes explained and the mechanics of tracking in cost basis; what 1099-DA adds is verification, not new liability.

Practical steps

Export everything, now and regularly. Full transaction history from every exchange you have used, including closed accounts. Platforms delete history, restrict access and occasionally freeze withdrawals; the record you did not export is the record you do not have.

Reconstruct basis for pre-regime holdings before you sell them. This is the single highest-value piece of work available, because after the fact it becomes archaeology.

Record transfers explicitly, with dates, amounts and both addresses, so a withdrawal followed by a later sale can be tied to its original acquisition.

Keep the income side separate. Rewards recognised as income need their own record of value at receipt, because that value is the basis you will rely on later.

Reconcile every form you receive against your own records before filing, and keep the working papers. A mismatch you explain in advance is a routine adjustment; one you discover through a notice is not.

The direction of travel

Information reporting for digital assets is converging on the model used for securities, and international frameworks extend the same principle across borders. The reasonable planning assumption is that any activity on a custodial platform, anywhere, is visible — and that the quality of your own records is the only variable you control.