Key Takeaways
- Form 1099-DA is the new IRS form for reporting digital asset (crypto) proceeds — issued by centralized brokers for 2025 transactions, filed in 2026.
- Custodial exchanges (Coinbase, Kraken, Gemini, Robinhood, etc.) are required to report your gross proceeds. Cost basis reporting kicks in for 2026 transactions.
- DeFi platforms, decentralized exchanges, and non-custodial wallets are NOT required to issue 1099-DA — Congress repealed the DeFi Broker Rule in April 2025.
- Your tax obligations on crypto have not changed — capital gains tax still applies. The 1099-DA just means the IRS is now seeing your trades automatically.
- Per-wallet cost basis tracking is now required. The old "universal" method (pooling across all wallets) is no longer allowed.
The IRS’s new Form 1099-DA hit mailboxes in early 2026 — the first time crypto investors have received a standardized tax form from their exchanges similar to what stock traders get from their brokers. If you trade on Coinbase, Kraken, Robinhood, Gemini, or any other major centralized platform, you should have received one covering your 2025 transactions.
Here’s what’s actually changed, what’s still the same, and what to do if your 1099-DA doesn’t look right.
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What Is Form 1099-DA and Why Does It Matter?
Form 1099-DA — “Digital Asset Proceeds From Broker Transactions” — is the IRS’s new standardized reporting form for crypto. It works like a 1099-B for stocks: your broker reports the proceeds from your sales directly to the IRS, and you get a copy to use when filing your taxes.
For 2025 transactions, covered brokers are required to report gross proceeds only — meaning the sale amount, not the cost basis or gain/loss. That expands in scope for 2026 transactions (more on that below).
The big picture: the IRS now has direct visibility into your crypto trading activity on centralized platforms. This isn’t new legislation — the reporting requirements were finalized in 2024 under rules stemming from the 2021 Infrastructure Investment and Jobs Act. But 2026 is the first filing year where these forms actually land in your mailbox.
| Reporting Period | What Brokers Must Report |
|---|---|
| 2025 transactions (filed 2026) | Gross proceeds only |
| 2026 transactions (filed 2027) | Gross proceeds + cost basis for covered securities |
Who Has to Send 1099-DA Forms?
The requirement applies to custodial brokers — platforms that hold your digital assets on your behalf. That includes:
- Centralized crypto exchanges (Coinbase, Kraken, Gemini, Binance.US, etc.)
- Crypto payment processors (PayPal, Cash App for crypto transactions)
- Digital asset kiosks and ATMs
- Hosted wallet providers
The form should arrive by February 17, 2026 for 2025 transactions. Brokers file their copies with the IRS by February 28 (paper) or March 31 (electronic).
DeFi Is Exempt — Trump Signed the Repeal
This is the biggest policy change in this space over the past year. In April 2025, President Trump signed legislation repealing the IRS’s so-called “DeFi Broker Rule” using the Congressional Review Act.
The DeFi rule would have required decentralized finance platforms, automated market makers (like Uniswap), and non-custodial wallet providers to issue 1099-DA forms starting in 2027. The repeal passed with bipartisan support — 70-27 in the Senate, 292-132 in the House — and Trump signed it.
What this means practically:
- Swaps on decentralized exchanges (DEXes) will not generate 1099-DA forms
- Liquidity pool transactions, yield farming, and similar DeFi activity won’t be reported by the protocol
- Non-custodial wallets (MetaMask, hardware wallets, etc.) have no reporting obligation
Important caveat: The repeal of the reporting requirement does not change your tax obligation. Gains from DeFi transactions are still taxable. The IRS expects you to track and report them yourself. The difference is the IRS won’t automatically receive that data from a third party — but you still owe the tax.
I’ve noticed a lot of confusion in reader emails about this. People hear “DeFi is exempt” and assume their profits are untaxed. They’re not. The exemption is from reporting, not from taxation.
Cost Basis Tracking: The Per-Wallet Rule
Starting January 1, 2026, brokers must report cost basis on covered securities — digital assets acquired on or after January 1, 2026 and held continuously in the same account until sold.
More importantly for active traders: the IRS has eliminated the “universal” cost basis method, which let you treat crypto across all your wallets and exchanges as one combined pool. Under the new rules, cost basis must be tracked per wallet or per account.
This matters if you regularly move crypto between exchanges or into cold storage. A Bitcoin you bought on Coinbase for $30,000 and then transferred to a hardware wallet is tracked at that $30,000 basis in that account — you can’t blend it with coins purchased elsewhere.
If you use crypto tax software (Koinly, CoinTracker, TaxBit, etc.), make sure it’s set up for per-wallet basis tracking for 2026 going forward.
Example: How 1099-DA Affects Your Filing
Example 1 — Simple case: Sarah buys 1 ETH on Coinbase for $2,800 in March 2025 and sells it for $3,500 in October 2025. Her 1099-DA will show $3,500 in gross proceeds. When she files her 2025 taxes, she reports the $700 gain ($3,500 minus $2,800 basis) on Form 8949. The 1099-DA doesn’t calculate the gain for her — it just gives the IRS the sale amount.
Example 2 — Multiple wallets: Mark buys 0.5 BTC on Kraken for $25,000 in January 2026 and moves it to a Ledger hardware wallet in February. He sells from the Ledger in November. His Kraken 1099-DA won’t show the sale (it happened off-platform). Mark needs to self-report the gain using the $25,000 basis from his Kraken purchase. Under the per-wallet rule, that $25,000 basis travels with those specific coins.
Your Tax Obligations Haven’t Changed
There’s been a lot of noise about Trump’s pro-crypto stance — and the administration has clearly been more favorable to the industry than its predecessor. But crypto is still fully taxable under current law.
- Short-term gains (held less than 1 year): taxed as ordinary income
- Long-term gains (held more than 1 year): taxed at preferential capital gains rates (0%, 15%, or 20% depending on income)
- Crypto used to buy goods/services: treated as a sale, triggering a taxable gain or loss
- Mining and staking rewards: treated as ordinary income at receipt
The PARITY Act — re-introduced in Congress by Representatives Horsford (D-NV) and Miller (R-OH) in 2026 — would change some of these rules, but it hasn’t passed. Until something new is signed into law, existing rules apply.
Things can shift quickly in this space. I’ll update this page when there are significant legislative changes — subscribe here to get notified.
Common Issues to Watch Out For
Your 1099-DA may show more proceeds than your actual gains. The form reports gross proceeds, not gains. If you sold Bitcoin for $50,000 that you originally bought for $45,000, the 1099-DA shows $50,000. You still need to report the $5,000 gain (and the $45,000 basis) separately on Form 8949. Don’t just plug the 1099-DA number into your return without reconciling it against your cost basis records.
Missing cost basis for older coins. If you bought crypto before 2026, brokers aren’t required to have your cost basis on file. If you transferred coins onto an exchange without the original purchase history, your broker may report “unknown” basis — and the IRS may default to treating the entire proceeds as gain. Document your purchase history, especially for pre-2023 holdings.
DeFi gains are still taxable — the exemption is from reporting only. I keep getting emails from people who think the DeFi repeal means their Uniswap gains are tax-free. They’re not. You’re just responsible for self-reporting them rather than having the protocol report them. Keep records.
Duplicate reporting if you move coins between platforms. If you transfer crypto from one exchange to another and the receiving exchange doesn’t know the original purchase date, it may report the transfer incorrectly. Review your 1099-DA for any transfers that shouldn’t be classified as sales.
Staking rewards reported at the wrong fair market value. Staking income should be taxed at the fair market value when received. If your exchange is using a different price snapshot than what you’d calculate yourself, the numbers may not match your records. Review carefully.