As we move into the middle of the decade, the IRS continues to roll out its multi year plan for digital asset reporting. In 2024 and 2025, taxpayers focused heavily on adjusting to the new per wallet method of calculating cost basis. That shift required many individuals to reorganize their crypto records and elect a safe harbor under Revenue Procedure 2024 28 in order to transition from the old universal basis approach.
Beginning in 2026, the next major part of the reporting framework arrives. This is when taxpayers will see brokers begin issuing Form 1099 DA for activity that occurred during 2025. Understanding what this form includes, what it leaves out, and how it affects your tax filing will be essential for anyone who bought, sold, or traded digital assets.
What Information Brokers Will Report on Form 1099 DA
In 2025, cryptocurrency exchanges and other platforms classified as brokers began collecting the data needed for the 2026 reporting season. Form 1099 DA will contain the gross proceeds from each digital asset sale. Gross proceeds simply refers to the dollar value of the crypto you sold for cash or exchanged for another token. It does not reflect gain or loss. It only captures the amount you received in the transaction.
What Will Not Appear on Form 1099 DA for 2025 Transactions
The most important omission on the 2026 version of Form 1099 DA is cost basis. Brokers are not required to provide basis information for sales that took place in 2025. This is a transitional rule that gives brokers time to build the systems needed to track cost basis on a wallet by wallet level.
Although this may be disappointing for taxpayers who have been waiting for a single consolidated document that mirrors Form 1099 B, the IRS has already announced that basis reporting will begin with transactions occurring in 2026. Starting in 2027, the Form 1099 DA that taxpayers receive will show both gross proceeds and cost basis.
How To Report Your Cost Basis Without Broker Provided Information
Even though brokers will only report proceeds on the 2026 forms, taxpayers still need to disclose cost basis on Form 8949. The IRS already expects differences between the basis shown on the tax return and the basis shown on the 1099 DA. In fact, the IRS released a fact sheet earlier this year confirming that most taxpayers will need to calculate their own basis for 2025 transactions.
This situation is not new. Many 1099 B forms issued by traditional brokerage firms do not include basis information for older or transferred securities. Taxpayers routinely fill in the missing details on Form 8949, and the same approach applies here.
When Taxpayers Should Expect Their 1099 DAs
Brokers must provide customers with the information they submit to the IRS on Form 1099 DA by February 17, 2026. Taxpayers who completed even a single digital asset sale or trade in 2025 should plan to receive at least one form.
Will Multiple Forms Be Issued for Multiple Transactions
In many cases, yes. The instructions for Form 1099 DA indicate that brokers are expected to complete the form for each sale. While the regulations permit some aggregation in specific circumstances, taxpayers with a high number of trades should plan for multiple documents.
If You Did Not Sell Any Crypto, Will You Still Receive a Form 1099 DA
Most taxpayers who only purchased crypto in 2025 will not receive a form. However, anyone who traded one digital asset for another should anticipate receiving a Form 1099 DA for each trade. Exchanging tokens is treated as a taxable event, even when no cash is involved.
How NFT Activity Will Be Reported
NFT marketplaces are generally considered brokers under the new regulations, which means they will usually issue Form 1099 DA. However, the rules allow marketplaces to aggregate certain transactions involving specified NFTs, which may reduce the total number of forms for some users. Artists who mint their own NFTs should anticipate receiving separate forms based on the nature of their activity.
How To Prepare Now for Form 1099 DA
Step 1: Compile a Complete List of Wallets and Exchanges
Document every wallet and exchange that held or transacted your crypto during 2025, including any platforms you began using this year. Identify which of these are U.S. based brokers, since those are the entities likely to issue Form 1099 DA. Do not forget NFT marketplaces and crypto ATM providers.
Step 2: Revisit Your Safe Harbor Allocation
Taxpayers who elected the safe harbor under Rev. Proc. 24 28 should review how they distributed cost basis across wallets at the start of 2025. Since the 2026 Form 1099 DA will not contain basis information, your safe harbor allocation will be a crucial part of calculating accurate gains and losses on your 2025 return.
Step 3: Document Year End Balances
Before the start of 2026, take screenshots of the balances for each token in every wallet and exchange. Capture the total quantity of each asset. These records help verify your holdings and can support your cost basis calculations for the next filing season. Timestamping your screenshots using tools like OpenTimestamps can strengthen documentation if you ever need to support your numbers during an audit.
Step 4: Keep All Forms and Provide Them to Your Tax Preparer
Even though the 2025 forms will only list gross proceeds, they still serve as critical documentation. The IRS will receive the same information from brokers. If the amount of proceeds you report on your return does not at least match the amount the IRS receives, their automated systems can generate a notice or trigger an audit. Always provide your preparer with all 1099 DAs.
Final Thoughts
The introduction of Form 1099 DA is a major milestone in the IRS push toward comprehensive digital asset reporting. Preparing now can make the upcoming filing season significantly smoother. If you want guidance on safe harbor allocations, wallet organization, cost basis tracking, or full crypto tax preparation, the professionals at Gordon Tax are ready to help you navigate every step.
Let us know if you would like this version optimized for SEO keywords or internal linking to other Gordon Tax resources.