Form 1099-DA: what crypto investors need to know

A tax form you've probably never seen is about to show up in your account, and it has an unfamiliar name: Form 1099-DA. If you bought, sold, or swapped crypto on an exchange like Coinbase or Kraken during 2025, you'll most likely get one in early 2026. It's the first IRS form built specifically for digital assets. The dollar figure printed on it can look alarmingly high, because in its first year the form often shows what you sold for without showing what you paid. Read it wrong and you'll think you owe tax on money that was never really a gain.

Who actually sends you one

The form comes from what the IRS calls a broker: a centralized, custodial platform that holds your coins for you and lets you move dollars in and out. Coinbase, Kraken, Gemini, and exchanges like them. The "DA" stands for digital asset.

You get a copy, and the IRS gets the same copy. That second part matters. Once a 1099-DA is filed, the IRS has a record of your activity on that platform, and their computers will look for it on your return. This first batch covers sales made on or after January 1, 2025, and it reaches you in early 2026, around the same window as your other year-end tax forms.

What the form reports, and what it leaves out

For 2025 activity, the number your exchange has to report is gross proceeds. That's the total dollars you received when you sold or swapped, before subtracting what you originally paid. It is not your profit.

The other half of the math, your cost basis, is mostly missing for 2025. Exchanges were allowed to include basis but weren't required to, and the IRS gave them penalty relief for the first year if they made a good-faith effort. Basis reporting phases in starting with 2026 sales, and even then only for assets the exchange treats as "covered." So the box that would tell you your actual gain is often blank on the first forms.

So a 2025 form with a big proceeds number and no basis is normal, not a red flag. Your job is to supply the missing side of the equation from your own records.

Why the number can look wrong

Two things trip people up. First, gross proceeds and gain are different amounts. Say you bought 1 ETH for $2,800 and later sold it for $3,000. Your 1099-DA can show $3,000 in proceeds. Your actual taxable gain is $200. Copy the $3,000 onto your return as income and you'd overpay badly.

Second, and this is the big one, transfers. Exchanges only know what happens on their own platform. Move coins between wallets or exchanges and the basis trail breaks. A quick example:

• You buy 1 BTC on Kraken for $40,000.
• You transfer that BTC to Coinbase.
• You sell it on Coinbase for $60,000.

Coinbase saw the $60,000 sale but never saw the $40,000 you paid on Kraken. Its 1099-DA may report $60,000 in proceeds with no basis, or with a basis it guessed at. Leave it uncorrected and it looks like a $60,000 gain instead of a $20,000 one. The more you've moved coins around, the more likely the form is incomplete.

The DeFi rule that got repealed

There was supposed to be a second, broader version of this. A rule finalized in late 2024 would have treated some decentralized finance front-ends, the kind of interface you use to swap on-chain, as "brokers" required to collect your identity and send 1099-DAs. In April 2025, Congress voted to kill that rule and the President signed the repeal. So a DeFi protocol like a decentralized exchange is not going to mail you a 1099-DA.

Read that carefully, because it's easy to misread. No form does not mean no tax. Your on-chain swaps, staking rewards, and DeFi trades are still taxable, and reporting them is still on you. The repeal took a reporting requirement off the platforms, not your obligation to pay. If anything it puts more weight on your own recordkeeping, since nobody is generating a paper trail for you on those trades.

What to do when one shows up

Start by not treating the form as the final word. It's a starting point you reconcile against your own complete history across every wallet and exchange.

Here's the flow. Pull your full transaction records for the year, including the coins you transferred in from somewhere else. Match each sale on the 1099-DA to your own record of what you paid. Report the sales on Form 8949 with the correct cost basis you fill in, which then totals onto Schedule D. Where the exchange's basis is blank or clearly wrong, use your own number and keep the documentation that backs it up.

A few things worth doing no matter what the form says:

• Answer the digital asset question at the top of Form 1040 honestly. If you sold, swapped, or received crypto, the answer is yes.
• Keep records for any coin you transferred between platforms. That's where basis breaks and where an audit letter would focus.
• Don't ignore a mismatch. If the IRS has a 1099-DA showing $60,000 in proceeds and your return doesn't account for it, expect an automated notice, even if your actual gain was small.

If the numbers don't line up and you can't tell why, that's the point to bring in someone who does crypto taxes for a living. A form with a $60,000 proceeds figure and a blank basis box is a normal thing to hand a professional. Which sales were short-term, which crossed the one-year line into long-term rates, and what your real basis was after a year of transfers is exactly the work they do.