Form 1099-DA (Digital Asset): What Brokers Will Report Starting 2026 — And What They Won’t

What Form 1099-DA actually reports

Form 1099-DA is the IRS’s first standardized information return for digital asset transactions. It applies to centralized brokers and exchanges — platforms like Coinbase, Kraken, Gemini, and Binance.US that custody your assets and execute trades on your behalf.

What the form includes:

• Gross proceeds from sales, exchanges, and dispositions of digital assets
• Date of the transaction
• Type of digital asset (identified by name or ticker)
• Quantity disposed

What the form does NOT include for 2025 transactions: cost basis. Basis reporting phases in for assets acquired on or after January 1, 2026. For the first filing cycle, your 1099-DA tells the IRS what you sold for — not what you paid. You supply cost basis yourself on Form 8949.

This is the core asymmetry. The IRS has your proceeds number from the exchange. If you don’t report matching cost basis with documentation, the IRS’s default assumption is that your basis is $0 — meaning 100% of proceeds are taxable gain.

Which brokers must issue Form 1099-DA

The IRS defines “broker” broadly under the final regulations: any person who, in the ordinary course of business, stands ready to effect digital asset sales on behalf of others. This clearly covers centralized exchanges. It also covers certain payment processors and hosted wallet providers that facilitate dispositions.

Covered (must issue 1099-DA):

• Centralized exchanges (Coinbase, Kraken, Gemini, Binance.US)
• Crypto-native payment processors that facilitate sales
• Certain hosted wallet providers where the platform controls private keys

Not covered (no 1099-DA):

• Decentralized exchanges (Uniswap, SushiSwap, Curve) — no central entity to issue the form
• Self-custody wallets (MetaMask, Ledger, Trezor)
• Peer-to-peer transactions
• Most DeFi protocols (lending, staking, yield farming platforms)

The gap this creates: if you only trade on Coinbase, the 1099-DA captures everything. If you move assets between exchanges, use DeFi, or hold in self-custody, the 1099-DA is a partial record. The IRS expects a complete Form 8949 regardless.

The cost-basis problem: FIFO, LIFO, and specific identification

Since 1099-DA doesn’t report cost basis for 2025 transactions, the burden falls on you. The method you choose — FIFO, LIFO, or specific identification — changes your tax bill materially.

Worked example: how cost-basis method changes the tax bill

A single filer in Chicago with $95,000 in W-2 income bought Bitcoin across three lots:

• Lot 1 (January 2023): 0.5 BTC at $22,000 — basis $11,000
• Lot 2 (October 2023): 0.5 BTC at $28,000 — basis $14,000
• Lot 3 (March 2024): 0.5 BTC at $62,000 — basis $31,000

In April 2026, she sells 0.75 BTC at $68,000 per BTC — $51,000 in total proceeds. All lots held over 12 months (long-term capital gains). Her 2026 taxable income after the $15,750 standard deduction puts her in the 22% ordinary bracket and the 15% LTCG bracket. MAGI is under $200,000, so no NIIT (the additional 3.8% under IRC § 1411 applies only above $200,000 single / $250,000 MFJ).

Difference: $3,000 in federal tax on a single 0.75 BTC sale — purely from the cost-basis method. FIFO produces the worst result here because the oldest lot has the lowest basis. LIFO wins because the most recent purchase (at $62,000) carried the highest basis.

The 1099-DA from Coinbase reports $51,000 in proceeds and nothing else. The cost-basis method is your decision — and your documentation burden.

Staking rewards: ordinary income whether or not it’s on the 1099-DA

Staking rewards are ordinary income at fair market value when received. This is consistent with IRS treatment of property received for services and the framework in Jarrett v. United States. Your basis in the received tokens equals the FMV you reported as income.

If you stake through Coinbase or Kraken, the exchange may report staking income on a 1099-DA or 1099-MISC. If you stake through a self-custody validator, Lido, Rocket Pool, or any DeFi staking protocol, no exchange files anything. The income is still taxable. The reporting is on you.

What this means practically: a 1099-DA showing $0 in staking income doesn’t mean you earned $0 in staking income. It means the exchange didn’t see it.

Airdrops: income at receipt under Rev. Rul. 2019-24

The IRS addressed airdrops and hard forks directly in Revenue Ruling 2019-24: when you receive cryptocurrency from an airdrop, it’s ordinary income at fair market value at the time you gain “dominion and control” — meaning the ability to transfer, sell, or otherwise dispose of the tokens.

Airdrops from protocols you interacted with (governance token distributions, retroactive rewards) typically land in your wallet without any exchange involvement. No 1099-DA is issued. But the IRS position is clear: it’s income when you can access it.

The part that catches people: an airdrop you forgot about — or one that landed in a wallet you stopped checking — is still taxable in the year you gained dominion and control. If you discovered $2,000 worth of tokens from a 2024 airdrop in your MetaMask wallet in 2026, the income was recognizable in 2024, not 2026. You may need to amend your 2024 return.

The wash-sale exemption: still alive in 2026

IRC § 1091 disallows losses on sales of “stock or securities” if you repurchase substantially identical assets within 30 days. The IRS classifies crypto as property under Notice 2014-21 — not stock or securities. The wash-sale rule does not apply to crypto as of 2026.

You can sell Bitcoin at a loss, immediately buy it back, and claim the full capital loss on Form 8949. This is the single biggest structural advantage crypto has over equities for tax-loss harvesting. With stocks, you’d need to wait 31 days or buy a “substantially different” security.

This matters for 1099-DA because the form will show the loss-generating sale. If the IRS later extends § 1091 to digital assets (which Congress has proposed but not enacted), same-day repurchases would become problematic. As of this writing, the exemption holds.

DeFi income: the biggest gap in 1099-DA coverage

DeFi transactions are where 1099-DA coverage drops to essentially zero. Decentralized protocols have no central entity to issue the form. Every taxable DeFi event is your responsibility to identify, classify, and report:

The guidance landscape: Notice 2014-21 established crypto as property. Rev. Rul. 2019-24 addressed airdrops and hard forks. Beyond that, the IRS has issued no specific guidance on LP tokens, yield farming, wrapped assets, or bridge transactions. Every classification above (except the airdrop line) is a reasonable interpretation, not an IRS-confirmed position.

Form 8949: where everything comes together

Regardless of what 1099-DA does or doesn’t report, every capital gain and loss from crypto goes on Form 8949 and flows to Schedule D. The form requires:

• Description of property (e.g., “2.5 BTC”)
• Date acquired
• Date sold or disposed
• Proceeds
• Cost basis
• Gain or loss
• Whether short-term (<12 months, taxed at ordinary rates) or long-term (≥12 months, taxed at 0%/15%/20% LTCG rates)

For 2026, the 15% LTCG rate applies to single filers with taxable income between $48,351 and $533,400, and MFJ filers between $96,701 and $600,050. Above those thresholds, the 20% rate applies. And if your MAGI exceeds $200,000 (single) or $250,000 (MFJ), the 3.8% NIIT under IRC § 1411 stacks on top — producing a maximum federal rate of 23.8% on long-term crypto gains.

The reconciliation challenge: your Form 8949 must be consistent with the 1099-DA your exchange filed with the IRS. If you report different proceeds than what appears on the 1099-DA (because of a transfer misclassified as a sale, for example), the IRS matching system will flag the discrepancy. Attach a statement explaining the difference. Keep transaction hashes and wallet-address records to support your position.

What to do: a practical checklist

The arrival of Form 1099-DA doesn’t change your tax obligations — crypto was always taxable as property. What it changes is the IRS’s visibility into your exchange transactions. Here’s how to prepare:

• Collect every 1099-DA from every exchange you used in the tax year. Multiple exchanges means multiple forms.
• Reconcile exchange-to-exchange transfers. Moving BTC from Coinbase to Kraken is not a sale — but if the exchange misidentifies a withdrawal, the 1099-DA may overstate proceeds.
• Track DeFi and self-custody activity separately. Use crypto tax software (CoinTracker, Koinly, or ZenLedger) to aggregate on-chain transactions the 1099-DA can’t see.
• Choose your cost-basis method deliberately. Don’t default to FIFO without modeling the alternatives. In a rising market, LIFO or specific identification often produces lower taxable gains.
• Report staking and airdrops as ordinary income at FMV when received — whether or not any 1099-DA mentions them.
• Keep records of every wallet address, transaction hash, and transfer. If the IRS questions a discrepancy between your 8949 and the exchange’s 1099-DA, on-chain records are your evidence.

IRS guidance: what exists vs. what’s missing

The IRS has issued roughly five pages of crypto-specific guidance for an asset class with thousands of token types and protocol interactions. Form 1099-DA is a reporting infrastructure improvement — it doesn’t resolve the underlying classification questions. If your crypto activity goes beyond simple buy-sell on a centralized exchange, have a CPA who specializes in digital assets review your Form 8949 before filing.

The bottom line on 1099-DA

Form 1099-DA brings crypto reporting closer to how stock trading has worked for decades: the broker reports proceeds, eventually basis, and the IRS matches it against your return. For investors who only trade on centralized exchanges, this simplifies compliance. For everyone else — DeFi users, stakers, airdrop recipients, multi-exchange traders — the 1099-DA is a partial record that needs to be supplemented with your own tracking.

The rules haven’t changed. Crypto is property (Notice 2014-21). Gains are reported on Form 8949. Staking is ordinary income. Airdrops are income at receipt (Rev. Rul. 2019-24). The wash-sale rule doesn’t apply (IRC § 1091 covers securities, not property). What’s changed is that the IRS now has a direct data feed from your exchange — and the gap between what they see and what you report is about to get a lot more visible.