Form 1099-DA Explained: The Checklist to Run Before You File
Your 1099-DA is not your tax return. It’s the IRS’s copy of what your exchange thinks happened, and for most long-time holders it will be incomplete.
Quick answer: Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is the information return US custodial crypto brokers file with the IRS and send to you. For 2026 sales, the form must show gross proceeds for every sale. It must show cost basis only for “covered” assets, meaning assets bought after 2025 and kept at the same broker. Everything else is still your job to prove.
TL;DR
2025 forms (received early 2026): proceeds only, no required basis. 2026 forms (arriving early 2027): proceeds plus basis, but only for crypto bought on or after January 1, 2026 and never moved out of that account. Anything you transferred in, or bought before 2026, is “noncovered.” Expect a blank basis box, and supply the basis yourself on Form 8949. You have until December 31, 2026 to record lot-selection standing orders in your own books under IRS temporary relief. That deadline is the most time-sensitive item below. What changed for 2026, and why this year’s form looks different
The rollout has two phases. For 2025, brokers only had to report gross proceeds and the sale date. Starting in 2026, they must also report cost basis and acquisition date for covered assets (CoinTracker). In practice, the 2025 forms that landed in early 2026 left the basis calculation to the holder (AlphaMaven/Finbold).
The IRS instructions for 2026 lay out the current rule: gross proceeds must be reported for all digital assets, basis must be reported for covered securities, and brokers may choose to report basis for noncovered securities (IRS).
So the 2027 filing season will be the first in which your 1099-DA contains a cost basis figure, and that figure goes to the IRS’s matching systems. A blank basis box is annoying. A wrong basis figure that the IRS treats as authoritative is worse.
“Covered” vs. “noncovered”: the distinction that decides everything
Almost every 1099-DA surprise traces back to this one definition.
Under the IRS instructions, a covered security is a digital asset acquired after 2025 in an account where the broker held custody, and held in that account until the broker sold it. Acquisition can be for cash, other digital assets, or other property (IRS).
Everything else is noncovered. The IRS lists the noncovered categories as:
assets the broker didn’t hold in custody when they were acquired, assets acquired before 2026, assets transferred in from elsewhere, assets acquired by certain exempt recipients or exempt foreign persons (IRS).
The transfer-in trap. Say you bought ETH on one exchange in 2021, moved it to a hardware wallet, then sent it to a second exchange in 2026 and sold it. That ETH is noncovered at the second exchange, no matter how clean your records are. The broker doesn’t know your 2021 cost. It knows the date the coins arrived. That arrival date is what box 12b reports.
One sale can produce several forms. The IRS gives an example: a customer who bought a token in 2022, April 2026, and August 2026, then sold everything in one June 2027 transaction, would get three separate Forms 1099-DA. One covers the short-term covered lot, one the long-term covered lot, and one the noncovered 2022 lot (IRS). If you get a stack of forms for what felt like a single trade, this is usually why.
Reading the form: box-by-box reference Box What it holds What to check 1a Digital Token Identifier (DTIF code) Unregistered tokens show 999999999. Normal, not an error. 1b / 1c Asset name / units sold, to 18 decimals Units should match your exported history. 1d Date acquired Blank if lots were bought on multiple dates, or if the asset is noncovered. 1e Date sold Should match your records. Watch time zones near midnight UTC. 1f Proceeds Already net of transaction fees. Don’t subtract fees a second time. 1g Cost or other basis Blank ≠ zero. See the checklist below. 2 Basis reported to IRS If checked, the IRS has the 1g number. 4 Federal income tax withheld Usually empty for 2026 under transitional relief. 6 Gain or loss + short/long-term/ordinary Only filled in when basis is reported. 7 Cash-only proceeds Unchecked means you received crypto or other property, not fiat. 8 Broker relied on customer-provided acquisition info Relevant if you gave lot info to the exchange. 9 Noncovered security Checked = basis is on you. 11a–c Optional methods for qualifying stablecoins and specified NFTs Aggregated reporting, usually without dates or basis. 12a / 12b Units transferred in / transfer-in date The transfer date, not your original purchase date.
Two details from the instructions that people miss:
Box 1f is already reduced by transaction costs. Brokers must subtract fees, commissions, and transfer taxes before reporting proceeds (IRS). A zero in box 1g has to mean a true zero basis. Brokers may only enter zero there if the asset actually had no basis (IRS). A blank 1g on a noncovered sale means “not reported,” not “your basis was nothing.”
The “Applicable checkbox on Form 8949” field has a one-letter code that tells you where each sale goes on your return:
Code Holding period Basis reported to IRS? G Short-term Yes