IRS Form 1099-DA – In the evolving world of cryptocurrency and digital assets, tax reporting requirements are becoming more stringent. If you’re involved in trading Bitcoin, Ethereum, NFTs, or other digital assets through brokers, you may soon encounter IRS Form 1099-DA. This form, introduced to enhance transparency and compliance, reports proceeds from broker-facilitated transactions. Whether you’re a crypto investor, trader, or broker, understanding Form 1099-DA is crucial for accurate tax filing and avoiding penalties. In this SEO-optimized guide, we’ll break down what the form is, who needs it, covered transactions, and how to use it effectively.
What is IRS Form 1099-DA?
Form 1099-DA, officially titled “Digital Asset Proceeds from Broker Transactions,” is a new IRS information return designed to report gross proceeds from the sale, exchange, or disposition of digital assets. It was created as part of the Infrastructure Investment and Jobs Act (IIJA) to close information gaps in digital asset reporting, ensuring taxpayers accurately report income, gains, and losses from crypto activities.
Starting with transactions in calendar year 2025 (reported in early 2026), brokers must use this form to notify both the IRS and taxpayers of relevant proceeds. For 2025 sales, reporting gross proceeds is mandatory, while basis (cost) information is optional but encouraged. From 2026 onward, basis reporting becomes required for covered securities.
This form applies to a broad range of digital assets, including cryptocurrencies, stablecoins, and non-fungible tokens (NFTs). Its primary goal is to simplify tax calculations for taxpayers while helping the IRS track unreported income from the growing crypto market.
Who Must File or Receive Form 1099-DA?
For Brokers (Filers)
A “broker” under IRS rules includes any person or entity that, in the ordinary course of business, facilitates sales of digital assets for others. This encompasses:
- Cryptocurrency exchanges (e.g., Coinbase, Binance.US)
- Digital asset kiosks that allow sales or exchanges for cash or other assets
- Certain payment processors or middlemen involved in digital asset transactions
U.S. digital asset brokers are required to file Form 1099-DA with the IRS and furnish a copy to the customer (recipient) for applicable transactions. If a broker effects 10 or more returns, electronic filing via the IRS’s Information Return Intake System (IRIS) is mandatory.
For Taxpayers (Recipients)
You’ll receive Form 1099-DA if you used a broker to:
- Sell or exchange digital assets for cash, other digital assets, property, or services
- Dispose of digital assets in a reportable change in control or capital structure (if the asset is also considered stock)
Even if you don’t receive the form, you must report all digital asset income, gains, and losses on your federal tax return. Common recipients include individual crypto traders, investors, and businesses dealing in digital assets.
What Transactions Does Form 1099-DA Cover?
Form 1099-DA reports proceeds from various digital asset dispositions, including:
- Sales or exchanges of cryptocurrencies like Bitcoin or Ethereum
- Dispositions of NFTs or stablecoins
- Transactions involving Qualified Opportunity Funds (QOFs)
- Reportable corporate changes if the digital asset is stock
Key details reported include:
- Gross or net proceeds (Box 1f)
- Cost or other basis (Box 1g, if provided)
- Date acquired and sold (Boxes 1d and 1e)
- Number of units (Box 1c)
- Gain or loss classification: Short-term, long-term, or ordinary (Box 6)
- Federal income tax withheld (Box 4)
For certain assets like qualifying stablecoins or specified NFTs, brokers can report aggregate gross proceeds and transaction counts instead of individual details. Losses from closing options or forward contracts are shown as negative amounts.
De minimis rules apply: Brokers may not need to report sales under certain thresholds, but check the latest IRS corrections for 2025 instructions.
How to Read and Use Form 1099-DA for Your Taxes?
Form 1099-DA helps you calculate capital gains or losses for Schedule D (Form 1040) and Form 8949. If basis is blank (e.g., for noncovered securities), use your own records to determine it.
Here’s a quick breakdown of key boxes:
- Box 1a-1c: Digital asset code, name, and units
- Box 1f: Proceeds (may be aggregate for stablecoins/NFTs)
- Box 1g: Basis (cost)
- Box 2: If basis was reported to IRS
- Box 5: If loss not allowed based on proceeds
- Box 11a-11c: Aggregate reporting for stablecoins or NFTs
Always report transactions on your tax return, even if the form has blanks. Consult IRS Publication 550 for adjustments like wash sales or market discounts.
To visualize the form, here’s an example:
Reporting Requirements and Deadlines
- Filing Deadlines: Brokers must furnish Copy B to recipients by January 31, 2026, for 2025 transactions. IRS filing is due by February 28 (paper) or March 31 (electronic) in 2026.
- Penalties: Failure to file or furnish can result in penalties. Good faith relief may apply for 2025 reporting.
- E-Filing: Required for 10+ forms; use IRIS for compliance.
Taxpayers should check the “digital assets” box on Form 1040 if they had reportable transactions.
Download IRS Form 1099-DA PDF
For the official blank form and instructions, download the PDF directly from the IRS website: https://www.irs.gov/pub/irs-pdf/f1099da.pdf. Note: Copy A must be ordered as a scannable form; do not print from the PDF for IRS submission.
Key Takeaways and Tips for Compliance
- Track your basis meticulously, as it’s essential for gain/loss calculations.
- Use tax software compatible with crypto reporting to import Form 1099-DA data.
- Consult a tax professional for complex transactions involving NFTs or stablecoins.
- Stay updated via IRS resources, as rules may evolve.
By understanding Form 1099-DA, you can navigate digital asset taxes more confidently. Remember, accurate reporting helps avoid audits and ensures compliance in the fast-paced crypto landscape. For more details, visit the IRS digital assets page.