What is Form 1099-DA?

The United States tax form on which custodial brokers, including centralized exchanges, report a customer's digital asset sales to the Internal Revenue Service and to the customer.

Gross proceeds reporting covers sales from January 1, 2025, with cost basis reporting phased in for units acquired from January 1, 2026 (source: Internal Revenue Service instructions for Form 1099-DA). It is the digital asset equivalent of the forms brokers already file for stock sales, and it changes the reporting relationship from one where the tax authority saw nothing to one where it sees your sales directly.

The point people miss is what the first year's form does not contain. Where basis reporting has not yet begun for a unit, the form shows what you sold it for and not what you paid, so a form reporting large proceeds is not a statement that you made a large gain.

How it works

A broker, which for these purposes includes custodial exchanges and certain payment processors, reports each sale or exchange of a digital asset for a customer.

The phase-in runs in two stages (source: Internal Revenue Service instructions for Form 1099-DA):

You receive a copy and the Internal Revenue Service receives one. The figures then have to be reconciled against your own records on form 8949, and any difference has to be explainable. Differences are common rather than exceptional, because a broker knows what happened inside its own platform and knows nothing about what you paid when you bought elsewhere or transferred in from a wallet.

Transfers are the persistent gap. Moving an asset in from self custody gives the broker no acquisition price, and moving out gives it no eventual sale. Keeping your own dated records across every venue and wallet is the only thing that closes it.

Example

Illustrative arithmetic. You bought 1 unit for $20,000 on one exchange in a prior year, transferred it to another exchange, and sold it there for $30,000. The selling exchange reports $30,000 of gross proceeds and, for a unit it did not see acquired, no basis. Your actual gain is $10,000, and demonstrating that is your job, using your own records from the first exchange.

Why it matters when you buy

Every purchase you make is the basis record a future sale will be measured against, so the moment to start keeping records is the first buy rather than the first sale. Buying across several venues multiplies the reconciliation work later. Read the rules for your jurisdiction at the tax pages.

Related terms

form 8949 — where you reconcile the figures, cost basis — what the form may omit, capital gains — what is actually taxed, taxable event — what triggers reporting, wallet by wallet accounting — the per-account tracking rule, tax lot — the records you need to keep.

Questions

Will I get one of these forms automatically?

If you sold digital assets through a custodial United States broker in a covered year, yes, you should receive a copy. Decentralized venues and self custody transactions are not covered by the same custodial broker reporting.

What if the form's figures do not match my records?

Report your actual figures and keep the documentation supporting them. Differences from transfers and prior-year purchases are expected, which is why the reconciliation happens on Form 8949.

Does receiving the form mean I owe tax?

No. It reports sales, not gains. Whether tax is due depends on your basis and holding period, which the form may not include at all in the early years.