A new survey suggests that many U.S. crypto investors are still struggling with tax reporting as the first filing season involving Form 1099-DA creates confusion around transaction records and cost basis.
According to an August survey by Awaken Tax, around one in five crypto investors who filed or planned to file a tax extension said they had either received an incomplete Form 1099-DA or were unsure whether the information matched their actual trades.
The survey covered 1,000 U.S. crypto investors and focused on the 2025 tax filing season.
Another 21% of respondents who had filed, or expected to file, an extension said they were still waiting for information from a crypto exchange or trading platform.
The findings highlight the difficulties many investors face when trying to calculate crypto gains and losses accurately.
What is Form 1099-DA?
Form 1099-DA is used by brokers to report certain digital asset transactions to the Internal Revenue Service.
For transactions made in 2025, brokers generally had to report the gross proceeds from covered crypto sales.
Gross proceeds show how much an investor received when selling an asset.
However, in many cases, the form does not show how much the investor originally paid for that asset, also known as the cost basis.
This can make tax calculations more complicated.
For example, if an investor bought Bitcoin for $9,000 and later sold it for $10,000, the taxable gain would generally be $1,000 before other adjustments.
A Form 1099-DA may show the $10,000 sale amount without including the $9,000 purchase price.
That means the taxpayer must calculate the cost basis separately.
Crypto investors must calculate their own cost basis
The IRS says taxpayers are responsible for reporting their crypto income, gains, and losses correctly, even if they do not receive a Form 1099-DA.
This means investors may need to use their own transaction records to calculate how much they originally paid for their digital assets.
Chris Herbst, managing director of CountDeFi tax reporting, explained that gross proceeds can appear much larger than an investor’s actual profits.
This happens because the form records the full value of each sale without subtracting the original purchase price.
For active traders, that difference can become significant.
A trader may have hundreds of thousands of dollars in total sales during a year while earning only a much smaller amount in actual profit.
Transfers between wallets make tax reporting more difficult
Calculating cost basis becomes even more complicated when crypto assets move between exchanges and private wallets.
For example, an investor might buy Bitcoin on one exchange, transfer it to a private wallet, and later sell it through another platform.
In this case, the selling exchange may not know the original purchase price.
The taxpayer may need records from every platform and wallet involved in the transaction.
Tax professionals recommend keeping a complete history that includes:
- Purchases and sales
- Trading fees
- Deposits and withdrawals
- Wallet transfers
- Transaction identifiers
Missing even one transaction can affect future gain or loss calculations.
This is especially important for investors who have held crypto for several years or moved assets between multiple wallets and exchanges.
Some exchange tax forms reportedly contain missing data
Tax professionals have also reported inconsistencies between exchange-issued 1099-DA forms and investors’ complete transaction histories.
Sharon Yip, founder of Crypto Tax Advisors, said her firm has seen cases where some 2025 transactions were missing from exchange tax forms.
In other situations, exchanges provided cost basis information for certain transactions but left it out for others.
One client reportedly completed more than $300,000 worth of stablecoin trades during 2025.
However, the exchange’s 1099-DA showed less than $100,000 in total stablecoin proceeds.
The difference forced the tax firm to compare the form with the client’s complete trading records before preparing the return.
Some investors received forms close to the tax deadline
Timing has also been a concern.
Andrew Duca, founder of Awaken Tax, said some crypto users received their tax forms late in the filing season.
He pointed to Kraken as one example, saying the exchange distributed forms to some customers roughly two weeks before the April 15 filing deadline.
Duca also highlighted an example of a Kraken Form 1099-DA that reportedly contained no transaction information.
Late or incomplete forms can make it more difficult for investors to finish their returns on time, especially when hundreds of transactions need to be reviewed.
What should taxpayers do if a 1099-DA is wrong?
The IRS provides guidance for taxpayers who receive an incorrect Form 1099-DA.
Investors can contact the issuer and request a corrected form.
They should also keep copies of both the original form and any correspondence related to the correction.
However, the IRS says taxpayers should not necessarily delay filing while waiting for an updated form.
Instead, they should use their own records to report transactions as accurately as possible.
Duca also advised investors not to simply copy the numbers shown on a 1099-DA into their tax return without checking them first.
The final tax return should reflect the taxpayer’s actual transactions, gains, and losses.
Crypto tax software still requires manual work
Another challenge is that many crypto tax platforms are still adapting to the new reporting system.
Andrew Gordon, executive director of Digital Asset Tax Action, said many taxpayers have struggled to reconcile their 1099-DA forms with their own records.
According to Gordon, most crypto tax software does not fully import and reconcile the new forms automatically.
Some platforms still require users to enter information manually because brokers did not provide machine-readable versions of their 2025 forms.
For active traders, that could mean reviewing or entering hundreds of transactions individually.
Gordon has called for brokers to provide machine-readable files alongside Form 1099-DA.
Such files could include details such as acquisition dates, purchase prices, fees, and transfers.
October 15 deadline approaches for taxpayers with extensions
U.S. taxpayers who received a filing extension generally have until October 15 to submit their 2025 federal income tax returns.
The extension gives taxpayers extra time to file their paperwork.
However, it does not usually provide additional time to pay taxes owed.
Any balance due was generally required by the original filing deadline.
This makes accurate recordkeeping particularly important for crypto investors who are still trying to reconcile exchange data before the October deadline.
Crypto tax rules are also receiving attention in Congress
Crypto taxation has also become a topic of discussion among U.S. lawmakers.
In September, proposed House legislation included an exemption for certain blockchain network transaction fees of up to $10.
Supporters of such measures argue that calculating gains and losses on small stablecoin payments and routine blockchain fees can create unnecessary reporting burdens.
Coinbase tax executive Lawrence Zlatkin previously told lawmakers that tracking gains and losses for everyday stablecoin payments can create significant compliance work.
However, the proposed legislation has not changed the current filing requirements for 2025 tax returns.
Cost basis reporting will expand in 2026
Form 1099-DA reporting requirements will become more detailed for some transactions made in 2026.
According to IRS broker instructions, mandatory cost basis reporting will apply to certain covered digital assets purchased in a custodial broker account after 2025 and held there until they are sold.
Assets purchased before 2026 or transferred into an exchange from another platform or wallet may still be classified as noncovered assets.
For those assets, cost basis reporting by brokers may remain optional.
Certain stablecoin and NFT transactions may also qualify for alternative reporting methods that do not require brokers to provide cost basis information.
As a result, investors may still need to maintain detailed records even as broker reporting requirements expand.
Accurate crypto records remain essential
The first filing season involving Form 1099-DA shows that crypto tax reporting is still developing.
While the new form gives the IRS and taxpayers more information about digital asset sales, it does not always provide everything investors need to calculate their taxable gains or losses.
For U.S. crypto investors, maintaining complete records of purchases, sales, transfers, and fees remains essential.
As reporting rules expand in 2026, better broker data may simplify the process, but investors will still need to verify their records carefully.
