What is Form 1099-DA? A Complete Guide for Digital Asset Reporting

What is Form 1099-DA? In the rapidly evolving world of cryptocurrencies, NFTs, and other digital assets, staying compliant with tax regulations is crucial. If you’ve engaged in buying, selling, or exchanging digital assets like Bitcoin or Ethereum through a broker, you may soon encounter IRS Form 1099-DA. This new form, introduced by the Internal Revenue Service (IRS), aims to streamline digital asset tax reporting and ensure accurate tracking of gains and losses. In this complete guide, we’ll break down everything you need to know about Form 1099-DA, including its purpose, who it’s for, key reporting details, and how it impacts your 2026 tax filing for 2025 transactions.

What Is Form 1099-DA?

Form 1099-DA, officially titled “Digital Asset Proceeds From Broker Transactions,” is a specialized IRS tax form designed specifically for reporting transactions involving digital assets. Unlike traditional forms like 1099-B, which handle securities, this form focuses on digital representations of value, such as cryptocurrencies and non-fungible tokens (NFTs), recorded on blockchain or similar technologies. Digital assets are defined as any digital value on a cryptographically secured distributed ledger, excluding cash like U.S. dollars or foreign currencies issued by governments.

The form reports gross proceeds from sales or dispositions of these assets, and in future years, it may include cost basis information to help calculate taxable gains or losses. It’s part of the IRS’s broader effort to address tax evasion in the crypto space, following updates from the Infrastructure Investment and Jobs Act.

Why Was Form 1099-DA Introduced?

The rise of digital assets has created challenges for tax reporting. Previously, brokers used forms like 1099-B or 1099-MISC for crypto transactions, leading to inconsistencies and underreporting. Form 1099-DA standardizes this process, making it easier for the IRS to track digital asset income and for taxpayers to comply.

Key reasons for its introduction include:

  • Enhanced Compliance: Brokers must now report directly to the IRS, reducing the risk of unreported gains.
  • Clarity for Taxpayers: It provides a clear record of proceeds, helping users calculate taxes on Schedule D (Form 1040) or Form 8949.
  • Adaptation to Digital Economy: With crypto transactions surging, the form modernizes reporting for assets like stablecoins and NFTs.

Recent updates include corrections to the 2025 instructions regarding de minimis rules for small sales and optional reporting methods for certain assets.

Who Must File Form 1099-DA?

Primarily, U.S. digital asset brokers are responsible for filing Form 1099-DA. A broker is defined as any entity that regularly facilitates sales of digital assets on behalf of others, including:

  • Crypto exchanges like Coinbase or Binance (U.S. operations).
  • Digital asset kiosks operators.
  • Processors of digital asset payments.
  • Entities that redeem their own issued digital assets.

Foreign brokers generally aren’t required to file unless they qualify as U.S. persons. Exemptions apply to certain transactions, such as those involving charities, IRAs, or foreign persons.

Brokers must file a separate form for each transaction, unless using optional aggregation methods for qualifying stablecoins or specified NFTs. Filing deadlines align with other 1099 forms: February 28, 2026, for paper filings or March 31, 2026, for electronic.

Who Receives Form 1099-DA?

You’ll receive Form 1099-DA if you used a broker to dispose of digital assets in 2025. This includes:

  • Selling or exchanging digital assets for cash, another digital asset, property, goods, or services.
  • Using digital assets to pay for broker fees or other investments like securities or commodities.
  • Closing transactions on options, futures, or forward contracts involving digital assets.

Even if you don’t receive the form, you must report all digital asset transactions on your tax return. Brokers furnish copies to recipients by January 31, 2026.

What Transactions Are Reported on Form 1099-DA?

The form covers “sales” broadly defined, including:

  • Exchanges for cash or stored-value cards.
  • Trades for different digital assets.
  • Payments for services, real estate, or other property.
  • Settlements of contracts like options or futures.

Not reported: Staking rewards, airdrops (unless via broker disposition), or wrapping/unwrapping assets. For 2025, only gross proceeds are mandatory; basis is voluntary.

Key Boxes and Information on Form 1099-DA

Form 1099-DA includes several boxes to detail transactions:

  • Box 1a-1c: Digital asset code, name, and number of units sold.
  • Box 1d-1e: Acquisition and sale dates (voluntary in 2025 for basis).
  • Box 1f: Gross proceeds (key for 2025 reporting).
  • Box 1g: Cost or other basis (voluntary in 2025).
  • Box 4: Federal income tax withheld (backup withholding).
  • Box 6: Type of gain or loss (short-term, long-term, or ordinary).
  • Box 9: Checked if the asset is a noncovered security (no basis required).
  • Box 11: For optional reporting methods on stablecoins or NFTs.

For qualifying stablecoins (e.g., USDT) or specified NFTs, brokers can use aggregated reporting to simplify.

Reporting Requirements: 2025 vs. 2026 and Beyond

  • For 2025 Transactions (Filed in 2026): Focus on gross proceeds only. Basis reporting is optional, with penalty relief for voluntary efforts. Transitional relief from backup withholding applies per Notice 2024-56.
  • For 2026 and Later: Mandatory reporting of both proceeds and basis for “covered securities” (assets acquired after 2025 with custodial services). Noncovered securities allow voluntary basis reporting without penalties.

This phased approach gives brokers and taxpayers time to adapt.

How to Use Form 1099-DA for Your Tax Return?

When you receive Form 1099-DA, use it to report on Form 8949 and Schedule D. Steps include:

  1. Calculate your cost basis (purchase price plus fees) if not provided.
  2. Determine holding period for short-term (≤1 year) or long-term (>1 year) gains.
  3. Report gains/losses, applying wash sale rules if applicable.
  4. Include all transactions, even those without a form.

If the form is incorrect or received in error, contact the broker immediately—don’t contact the IRS directly. Keep detailed records of all digital asset activities to avoid inflated tax bills.

Common Questions About Form 1099-DA

  • Do I need to report if I didn’t receive the form? Yes, all digital asset income must be reported.
  • What if basis isn’t included? For 2025, it’s common; use your records to calculate.
  • Are NFTs and stablecoins treated differently? Yes, optional aggregated reporting may apply.
  • What about penalties? Brokers face penalties for non-compliance; taxpayers for underreporting.

For more FAQs, check the IRS digital assets page.

Conclusion

Form 1099-DA marks a significant step in digital asset tax reporting, helping both the IRS and taxpayers navigate the complexities of crypto taxes. By understanding its requirements and keeping accurate records, you can ensure compliance and avoid surprises during tax season. Always consult a tax professional for personalized advice, especially with the new rules rolling out in 2026. Stay informed on IRS updates to make digital asset reporting seamless.