A covered digital asset was acquired on or after January 1, 2026 in a custodial broker account, so the broker reports its cost basis. Anything acquired earlier, or transferred in from elsewhere, is noncovered and reported with proceeds only.
Covered: broker reports basis. Noncovered: broker reports proceeds only and you prove basis. Transfers between platforms make covered assets noncovered at the receiving broker.
The distinction decides whether the IRS receives a basis figure for your sale. Noncovered sales arrive with a blank basis box, and a blank box is not zero. Most long-term holders will have noncovered assets for years, which is why reconciliation does not go away in 2026.
No. It means you, not the broker, have to document the basis on Form 8949. The tax is still on the gain.
Source: Treas. Reg. 1.6045-1(a); Form 1099-DA instructions
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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