What Is Form 1099-DA and How Do I Use It?

Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is a new form that standardizes the reporting for sales and exchanges of assets like cryptocurrency and non-fungible tokens (NFTs). Stemming from the Infrastructure Investment and Jobs Act, this requirement brings digital asset reporting in line with traditional financial instruments, such as stocks and bonds reported on Form 1099-B. For investors, this means receiving a standardized document to simplify reporting gains and losses. Beginning with the 2025 tax year, “brokers” like cryptocurrency exchanges must issue this form to both investors and the IRS. Brokers will send these forms in early 2026 for transactions that occurred during 2025.

Understanding the Information on Form 1099-DA

Form 1099-DA reports the gross proceeds from your digital asset sales in Box 1a. This figure represents the total amount you received from a sale before any expenses are deducted; it is not your net profit. The form will also include the date of sale and the specific type of digital asset sold, such as Bitcoin or Ethereum.

The form distinguishes between the date you acquired an asset and the date you sold it, which are used to determine your holding period. This distinction classifies your capital gains or losses as either short-term or long-term. Transactions involving assets held for one year or less are considered short-term, while those involving assets held for more than one year are long-term, a classification that impacts the tax rates applied to any gains.

Cost basis is the original price you paid to acquire the asset, plus any associated transaction fees. While Form 1099-DA includes a box for cost basis (Box 1e), mandatory reporting of this figure by brokers is being phased in. For sales in 2025, brokers are only required to report gross proceeds; cost basis reporting is optional for them until it becomes mandatory for sales starting in 2026. The form will have a checkbox to indicate whether basis has been reported to the IRS.

The “Wash Sale Loss Disallowed” box is another element, as the wash sale rule now applies to digital assets. This rule prevents taxpayers from claiming a loss on the sale of an asset if they purchase a “substantially identical” one within 30 days before or after the sale. If an amount appears in this box, it means a loss you realized is not currently deductible and is instead added to the basis of the replacement asset.

How to Report Transactions Using Form 1099-DA

The information on Form 1099-DA is used for completing Form 8949, Sales and Other Dispositions of Capital Assets. This form is where you will detail each of your digital asset sales, simplifying what was once a complex self-reporting process.

You will use the figures from your Form 1099-DA to fill out the corresponding columns on Form 8949. For instance, the proceeds listed in Box 1a of the 1099-DA are entered into column (d) of Form 8949. The cost basis from Box 1e goes into column (e). The acquisition and sale dates from the 1099-DA are also transferred directly to Form 8949, which helps determine whether the resulting gain or loss is short-term or long-term.

At the top of Form 8949, there are checkboxes that you must select based on how your broker reported your transactions. If your Form 1099-DA indicates that the cost basis was reported to the IRS, you will check Box A for short-term transactions or Box D for long-term transactions. If the basis was not reported to the IRS, you would use Box B or Box E, respectively. This alerts the IRS to the nature of the data being reported.

After all individual transactions are listed on Form 8949, the totals are carried over to Schedule D, Capital Gains and Losses. Schedule D summarizes your total short-term and long-term gains and losses from all sources, including digital assets. The final net gain or loss from Schedule D is then transferred to your main tax form, Form 1040.

Addressing Incorrect or Missing Forms

If you receive a Form 1099-DA that you believe contains incorrect information, such as an inaccurate cost basis or proceeds amount, your first step should be to contact the broker who issued it. The broker can review their records and, if an error is confirmed, issue a corrected Form 1099-DA.

In the event a broker does not provide a corrected form, you are still responsible for reporting the correct information on your tax return. You should fill out Form 8949 with the accurate figures for the transaction. The IRS provides specific adjustment codes that can be used on Form 8949 to report a discrepancy between the information provided by the broker and the information you are reporting.

It is also possible that you may not receive a Form 1099-DA from a broker, even if you had reportable transactions. The obligation to report all sales and exchanges of digital assets remains with you, the taxpayer, regardless of whether a form is issued. In this situation, you must reconstruct your transaction history by gathering data on acquisition dates, cost basis, and sale proceeds from your own records or exchange transaction histories. You will then use this self-gathered information to complete Form 8949 and Schedule D accurately.