IRS Reporting · September 11, 2026 · 11 min read · By CryptoTaxCalc Team

Form 1099-DA Explained 2026: What the New IRS Crypto Form Means for You

The IRS now gets a copy of every crypto sale you made on a major exchange. Form 1099-DA arrives this filing season — and on millions of them, the cost basis will say $0. Treat it as a final bill and you'll overpay by thousands.

Image: Illustrative purposes. Rules cited from IRS Form 1099-DA instructions, final broker regulations, and Notice 2024-57.

Imagine opening your tax portal in February and finding a brand-new IRS form you've never seen before. It says you sold $42,000 worth of crypto last year. Next to that number, in the cost basis column, it says $0.00. The IRS has a copy. Their computer does the obvious math: $42,000 of income, tax due on all of it.

That's not a hypothetical. It's the standard experience for millions of people filing their 2025 taxes in 2026, because this is the first year of Form 1099-DA — and for this first year, brokers are required to report what you sold for, but usually not what you paid. If you ever moved coins between exchanges or wallets, the receiving exchange genuinely doesn't know your purchase price. The blank is their honest answer to a question nobody gave them the data for.

The good news: you're not stuck with that number. The form is information, not a tax bill. Your job this filing season is to understand what it says, find the holes, and fill them with your own records. Here's how the whole system works, who gets a form, where the traps are, and what to do this week.

1. What Form 1099-DA actually is

Form 1099-DA — full name, Proceeds From Broker and Reverse Exchanges in Connection With Digital Assets — is the form Congress ordered up in the infrastructure legislation passed in 2021. Think of it as the crypto version of the 1099-B you get from a stockbroker. A broker reports your dispositions to both you and the IRS, and the IRS matches it against your return.

Before this, exchanges limped along with Form 1099-K, a form built for payment processors like Stripe and Square. It was a bad fit. Depending on the exchange, your 1099-K might show your total transaction volume — coins bought and sold, money sloshing back and forth — as if it were income. People who broke even or lost money received forms making them look like they earned six figures. The IRS was flooded with mismatches. 1099-DA is the cleanup.

The rollout is staggered, and the timing matters a lot:

Read that first row again. For the return you're filing right now, your exchange reports proceeds with no requirement to know your basis. That single design decision is why the $0 basis problem exists at scale this year.

2. Who sends one — and who doesn't

The definition of "broker" went through several rounds of regulation and litigation. The current version, finalized in late 2024, is narrower than the Treasury originally proposed.

You should expect a 1099-DA from:

• Custodial exchanges: Coinbase, Kraken, Binance.US, Gemini, Crypto.com, and similar
• Payment apps that broker digital asset sales (Cash App, PayPal)
• Bitcoin kiosks and ATMs above the reporting threshold

You generally won't get one from:

• Decentralized exchanges — Uniswap, Jupiter, dYdex, and the rest
• Self-custody wallets — MetaMask, Ledger, Phantom
• Most DeFi protocols: Notice 2024-57 pauses reporting for wrapping/unwrapping, liquidity pool deposits and withdrawals, and staking

Don't confuse "no form" with "no tax." Every one of those DeFi swaps is still a taxable disposition under long-standing IRS guidance. The reporting gap just means the IRS is relying on you — for now. As the transfer-reporting rules phase in through 2027, the picture fills in automatically.

3. The $0 basis trap, with real numbers

Here's the most common scenario behind those blank basis boxes:

1. You bought 1 ETH on Coinbase for $1,800 in 2023.
2. You moved it to MetaMask, then later to Kraken to sell.
3. You sold it on Kraken in 2025 for $4,250.

Kraken saw 1 ETH arrive out of nowhere. They have no record of the 2023 purchase — that happened on a competitor's platform. So their 1099-DA reports:

That's $432 of overpaid tax from a single ETH — one coin, one transfer. Scale it across a portfolio of dozens of transfers and the overpayment runs into thousands of dollars. The same thing happens with coins bought before exchanges tracked basis, coins received through airdrops or mining, and anything imported via a blockchain bridge.

The IRS computer doesn't know the blank is a data artifact. If your Form 8949 repeats the $0, you've volunteered to pay tax on money that was never income. We wrote a full repair guide here: what to do when your 1099-DA shows missing or $0 cost basis. The short version — download every exchange's complete CSV history now, before older accounts get harder to access.

4. The form is not your tax bill — 8949 is where the real return happens

This is the mental model to hold onto. 1099-DA is a third-party information return, like a W-2 or a 1099-INT. Your actual crypto tax calculation still lives on:

• Form 8949 — one row per disposition (or aggregated rows per category), with proceeds, basis, adjustment codes, and gain/loss
• Schedule D — the summary of short-term and long-term net results
• Schedule 1 — staking, mining, and airdrop income reported as ordinary income

When your basis is better than the form's — and it will be, for anything that moved platforms — you simply report the correct higher basis on Form 8949. No permission required. The IRS expects you to. Keep the evidence with your tax records: purchase confirmations, full account-history CSVs, or blockchain explorer records paired with historical price data from CoinGecko or CoinMarketCap.

If the form itself is genuinely wrong — it counts a transfer to your own wallet as a sale, or duplicates a transaction — ask the broker for a corrected 1099-DA. File accurately anyway, on time, and attach a brief explanation if the discrepancy is large. Do not wait for the correction to file; an extension to file isn't an extension to pay.

5. How the matching actually works (and the CP2000 letter)

The IRS's Automated Underreporter program compares the forms attached to your Social Security number against the numbers on your return. The comparison isn't sophisticated — it mostly sums proceeds. When the sum of your 1099-DA forms exceeds what your Schedule D reports, the system generates a CP2000 notice months later: proposed additional tax, plus penalties and interest.

Two practical consequences. One, your reported proceeds should reconcile to the forms, even when your basis differs — don't omit a sale because you know you lost money on it. Two, basis mismatches don't trigger CP2000 the same way, because basis isn't on the 2025 forms; that audit angle develops in later years when basis reporting matures. For now, the danger is failing to report a disposition the IRS already knows about, which is exactly why some people who skipped crypto reporting for years are getting caught in 2026.

There's also a privacy wrinkle worth knowing. 1099-DA can include specific wallet addresses and transaction IDs — meaning an on-chain pseudonym gets formally tied to your legal identity in IRS records. That horse has left the barn for anyone who KYC'd on an exchange, but it's one more reason not to use someone else's account or mix personal and business activity casually.

6. What's paused: the DeFi carve-out

The DeFi community expected reporting obligations to reach smart-contract platforms in 2026. That didn't happen. The 2024 final regulations narrowed the broker definition, and Notice 2024-57 grants transition relief through the end of 2028 for categories including:

• Token wrapping and unwrapping (ETH ⇄ WETH)
• Contributing assets to and withdrawing from liquidity pools
• Staking through certain decentralized arrangements

"Relief from reporting" means no 1099-DA from the protocol. It does not mean the transaction isn't taxable. Wrapping is generally non-taxable (same economic asset), but swapping LP tokens back out, claiming rewards, or selling staked derivatives can create taxable events you still report yourself. Our DeFi tax guide walks through which moves cost you.

7. The dates that matter

Don't wait for a paper envelope. Exchanges are increasingly allowed to deliver forms digitally, and some have made electronic delivery the default. The form exists in your account whether or not you notice the email.

8. What to do this week

Forget theory — here's the checklist I'd run myself, in order:

• Log into every exchange you've ever used and download the complete transaction history CSV (account opening to today), not just the tax summary. Transfers need the full ledger to reconstruct basis.
• Pull self-custody records from Etherscan, Solscan, or your wallet export for anything that touched a DEX.
• Build one list of dispositions and match each sale against its purchase. Our FIFO cost basis guide shows the method the IRS defaults to, and our CSV batch importer runs entirely in your browser — no upload, no account — to bucket short- and long-term trades.
• Estimate the actual tax with your real basis and holding periods before you fill anything in: the US calculator applies the current short-term and long-term brackets, so you can see the number you're actually signing for.
• Reconcile proceeds to the 1099-DA totals. Same proceeds, corrected basis. If you sold losers, report them — losses offset gains, and up to $3,000 of excess loss offsets ordinary income.
• Got a big loss position still open? Year-end is past, but the strategy never changes: see how much harvesting would save before your next filing cycle.

The takeaway

The era of crypto tax-by-honor-system is over, and the first year of any new reporting regime is always messy — for the IRS as much as for you. Forms will be incomplete, basis boxes will be blank, and some transfers will be mislabeled as sales. The people who pay too much in 2026 aren't the people with complicated histories; they're the people who take the form's numbers as truth.

Your records are the correction mechanism. Pull them this week, while every account is still accessible, and let the form be the start of your reconciliation — not the end of it.

Have your 2026 1099-DA forms arrived yet? Did any of them show a $0 or N/A basis, and what was the weirdest transaction on them? Drop it in the comments below — between all of us, we've probably seen every reporting quirk the exchanges can produce.