Key takeaways
- Form 1099-DA reports gross proceeds for 2025 sales and basis for covered assets sold in 2026.
- Coins bought before 2026 are noncovered, so the form will not show their basis.
- A missing 1099-DA does not mean no tax is due, because the Form 1040 digital asset question still applies.
- Ask each platform for its 1099-DA and a full transaction export, not only the PDF.
Who issues Form 1099-DA
Form 1099-DA is the form a broker uses to report digital asset proceeds from broker transactions. The IRS lists covered brokers as custodial trading platforms, certain hosted wallet providers, digital asset kiosks and certain payment processors.
A decentralized broker that does not take possession of the assets is not a covered broker, so a sale made through one may produce no 1099-DA at all. The Form 1040 question still applies to those sales, so the firm needs the client's own on-chain records for them.
2025 and 2026 are different reporting years
Brokers must report gross proceeds for transactions on or after Jan. 1, 2025. Basis reporting starts with transactions on or after Jan. 1, 2026, and applies only to covered assets.
For tax year 2025, Form 1099-DA was excluded from the Combined Federal/State Filing Program, so do not assume the state copy comes with the federal one. For 2025 transactions the IRS will not impose penalties for a broker's failure to file or furnish Form 1099-DA if the broker made a good-faith effort.
Decision rule: for a sale in tax year 2025, expect gross proceeds only and build the basis from the client's purchase records. For a sale in tax year 2026, check whether the form reports basis before you use it.
Covered or noncovered: the rule that decides the basis
A covered security for this purpose is a digital asset acquired after 2025 for cash, stored-value cards, different digital assets, or any property or services, held in a custodial account. The IRS defines a noncovered security as any digital asset that is not a covered security, and noncovered assets include assets acquired before 2026 and assets transferred in to the broker.
For a noncovered sale the broker is not required to report basis, although it may do so voluntarily. Example one: the client bought 0.5 BTC in 2024 for $10,000 on Platform A and sold it in September 2026 for $30,000 on the same platform. The coin was acquired before 2026, so the form shows $30,000 of gross proceeds and no basis. The holding period is more than one year, so the sale goes on Form 8949 in box K. The client reports the $10,000 basis from the 2024 purchase record and a $20,000 long-term gain.
Example two: the client bought 1 ETH in March 2026 for $3,000 on Platform A and sold it in October 2026 for $4,000. The ETH is covered, so Platform A reports the $3,000 basis. The holding period is one year or less, so the sale goes on Form 8949 in box G. Check the platform's basis against the purchase record anyway, because a coin moved in from another account would be noncovered.
Form 8949 codes and the Form 1040 question
Sales of digital assets held as a capital asset go on Form 8949. A holding period of one year or less is short-term, and more than one year is long-term. The box tells the IRS whether basis was reported: G is short-term with basis reported, H is short-term without it, J is long-term with basis reported, and K is long-term without it.
Box Y applies when you cannot determine whether the sale belongs in box H or box K. The fix is to pull the acquisition date from the client's records. Do not guess the holding period on a coin bought within a few weeks of the one-year mark.
Form 1040 requires a Yes or No answer to the digital asset question. It asks whether the client received a digital asset as a reward, award or payment, or sold, exchanged or otherwise disposed of one. If there was any such transaction, the answer is Yes, and the sale must be reported whether or not it produced a gain or loss.
Thresholds that keep sales off the form
Three reporting exceptions reduce what a broker sends. For payment processors, sales of $600 or less for the year are not reported on Form 1099-DA. Under the optional method for qualifying stablecoins, designated sales are not reported if aggregate gross proceeds do not exceed $10,000 for the year. Under the optional method for specified NFTs, sales are not reported if aggregate gross proceeds do not exceed $600 for the year.
These thresholds limit what the broker reports, not what the client owes. A client who sold $400 of coins through a payment processor and received no 1099-DA still answers Yes on the Form 1040 question and reports the sale. Ask for the platform export so the small sales are not missed.
What to send the firm, and how to ask
Ask for three things from each platform: every Form 1099-DA the client received for 2025 and 2026, a full transaction export with acquisition dates and cost basis where the platform has them, and the transfer history between that platform and any wallet.
Exact wording to send: “Please send every Form 1099-DA you received for 2025 and 2026, plus a full transaction export from each exchange, wallet and app you used. The export should show the date each coin was acquired, what you paid for it and any transfers between accounts.” Send it in one message with the list of platforms the client used.
Decision rule: if the client traded through a self-custody wallet or a decentralized exchange, ask for the on-chain records, because there may be no 1099-DA for those sales. If the client has only PDFs, request the CSV export before anyone prepares Form 8949.
Deadlines and backup withholding
For 2025 transactions the IRS guidance for Forms 1099-B, 1099-DA, 1099-S and 1099-MISC set February 17, 2026 as the date to furnish the statement to the recipient. Paper filing with the IRS was due March 2, 2026, and e-filed forms were due March 31, 2026. Form 1099-DA cannot go through the FIRE System and must be e-filed through IRIS.
The Form 1040 for tax year 2025 was due April 15, 2026. Tax year 2026 returns are filed in 2027, and the 2026 dates were not on the IRS pages I checked, so confirm them on irs.gov before quoting a date to a client.
Backup withholding is a flat 24% rate. A payer must withhold when the customer did not give its TIN in the required manner, or when the IRS notifies the payer that the TIN is incorrect. Failure mode: the client opened an account under a wrong number, the platform withholds 24% from sales proceeds, and the client finds out at tax time. Fix: check the TIN on each platform account against the client's return before year end.
Failure modes and fixes
Failure: the client enters gross proceeds as income with no basis. The gain is overstated by the full cost of the coins. Fix: enter the basis from the purchase records and use the box code that matches the basis status, K or H for noncovered sales.
Failure: the basis on a 2026 covered sale does not match the client's records. Fix: write down the difference, the platform's figure and the purchase record, and agree the basis with the client before filing. Do not file a number you cannot support.
Failure: the client believes that no 1099-DA means no tax. Fix: ask the Form 1040 digital asset question on the intake form and record the client's Yes or No in writing, with the platforms and wallets they used.