What Form 1099-DA Actually Shows
Form 1099-DA can show how much an investor received when selling a digital asset, but it may not show how much the investor originally paid for that asset.
For example, imagine an investor bought Bitcoin for $9,000 and later sold it for $10,000.
The actual gain would be $1,000 before any applicable adjustments.
However, a 2025 Form 1099-DA might only report the $10,000 sale proceeds without including the $9,000 cost basis.
This difference is important because gross proceeds can appear much larger than an investor’s actual taxable profit.
Chris Herbst, managing director of CountDeFi tax reporting, explained that active traders can see very large gross proceeds on their forms because every sale is counted at its full value.
Taxpayers then have to match those sales with their purchase records to calculate the real gain or loss.
Investors Still Need Their Own Crypto Records
The IRS requires taxpayers to report digital asset income, gains, and losses even if they do not receive a Form 1099-DA.
That makes accurate recordkeeping especially important.
Investors may need to combine information from several sources if they bought an asset on one exchange, moved it to a private wallet, and later sold it through another platform.
A complete crypto transaction history can include:
- Buy and sell transactions
- Trading fees
- Deposits and withdrawals
- Wallet transfers
- Transaction IDs
- Acquisition dates
- Original purchase prices
Missing records can make it much harder to calculate the correct cost basis, especially when crypto has moved between several wallets or platforms over multiple years.
Crypto Exchanges Are Showing Reporting Differences
Tax professionals have also reported differences between investor records and the information appearing on some 1099-DA forms.
Sharon Yip, founder of Crypto Tax Advisors, said her firm had found situations where forms did not fully match clients’ transaction histories.
According to Yip, some forms omitted trades, while others included cost basis for certain transactions but not for others.
In one example, a client had more than $300,000 worth of stablecoin trading activity during 2025.
However, the exchange’s 1099-DA reportedly showed less than $100,000 in total stablecoin proceeds.
That required the tax firm to compare the form against the investor’s complete transaction history before determining what should be reported.
Late and Incomplete Crypto Tax Forms Add Pressure
Some investors also received their tax forms late in the filing season.
Andrew Duca, founder of Awaken Tax, said some customers received forms only shortly before the April 15 tax deadline.
He cited Kraken as one example and said some forms arrived around two weeks before the filing deadline.
Duca also pointed to an example of a 1099-DA that reportedly contained no transaction information.
Situations like these can make filing more complicated, particularly for investors with a large number of trades.
The IRS advises taxpayers who receive an incorrect form to request a corrected version from the issuer.
However, taxpayers generally should not delay filing simply because they are waiting for a correction.
Instead, they should use their own records to report transactions as accurately as possible.
Taxpayers Should Compare Forms With Transaction History
Tax professionals are advising investors not to simply copy the numbers from Form 1099-DA directly into a tax return.
Instead, investors should compare the information with their complete transaction history.
The goal is to make sure that the return reflects actual gains and losses, even when a broker’s form is incomplete or inaccurate.
This becomes especially important for people who actively trade across several exchanges or move assets between custodial platforms and self-custody wallets.
Manual Crypto Tax Reporting Remains a Major Problem
Another issue is that many crypto tax software platforms still cannot fully import and reconcile Form 1099-DA automatically.
Andrew Gordon, executive director of Digital Asset Tax Action, said some investors have had to manually enter large numbers of transactions.
For active traders, this could mean reviewing or entering hundreds of individual records.
Gordon has called on crypto brokers to provide machine-readable files alongside Form 1099-DA.
Such files could include important information such as:
- Acquisition dates
- Purchase amounts
- Fees
- Transfers
- Sale proceeds
Providing this information in a standardized digital format could make it easier for investors and tax software to reconcile transactions.
October 15 Deadline Approaches for Extended Returns
Taxpayers who received a federal filing extension generally have until October 15 to file their 2025 tax return.
However, the extension usually applies only to filing the return.
Any tax balance owed was generally still due by the original filing deadline.
Investors with unresolved crypto transactions therefore have limited time to collect records, compare exchange statements, and calculate their gains and losses.
Crypto Tax Rules Are Also Getting Attention in Congress
Crypto tax reporting has also become a policy issue in Washington.
Recent legislation discussed in the House has included proposals that could reduce the tax burden associated with certain small blockchain transaction fees.
Lawmakers and industry representatives have argued that calculating gains and losses on routine stablecoin payments and network fees can create significant compliance work.
However, these proposals have not changed the reporting requirements for 2025 tax returns.
Investors still need to follow the current rules when completing their filings.
What Changes for Crypto Tax Reporting in 2026?
The next phase of Form 1099-DA reporting applies to digital asset transactions made during 2026.
Under IRS guidance, brokers will be required to report cost basis for certain covered digital assets.
Generally, this applies to eligible assets purchased in a custodial broker account after 2025 and held there until they are sold.
Assets acquired before 2026, as well as crypto transferred into a broker from another wallet or exchange, may still be treated as noncovered assets.
For those transactions, investors may still need to calculate their own cost basis.
Certain stablecoin and NFT transactions may also be reported using alternative methods that do not necessarily include basis information.
What Crypto Investors Should Do
The first year of Form 1099-DA reporting shows that investors cannot rely entirely on broker-issued tax forms.
The safest approach is to maintain a complete transaction history and compare it with every tax form received.
Investors who have used several exchanges, self-custody wallets, DeFi platforms, or stablecoins may need to reconcile records from multiple sources before filing.
As crypto tax reporting becomes more standardized, the process could become easier.
For now, however, accurate personal records remain one of the most important tools for avoiding mistakes on a crypto tax return.
Disclosure: This article is for informational and educational purposes only and should not be considered tax, legal, or financial advice.
