Tax Services
Tax Return Preparation Tax Services Pricing Non-Filer Tips Tax Deadlines Do My Own Taxes Tax Help Center Tax Glossary
Crypto Services
Crypto Gain Calculations Crypto Services Pricing
IRS Resolution
Tax Shield Guard Dog Pricing IRS Monitoring Report IRS Notices Help with Audit
1099-DA
1099-DA Safe Harbor
About
Clinton Donnelly About Us Blog Contact
Contact Us

IRS Form 1099-DA: What Crypto Traders Must Report in 2026

By Clinton Donnelly, Updated July 9, 2025

Starting in 2026, the IRS will begin receiving direct reports of your crypto activity.
Here's what that means and how to stay ahead of it.

Get Help With 1099-DA Reporting
Video Poster Image

IRS Form 1099-DA: What Crypto Traders Must Report in 2026

By Clinton Donnelly, Updated July 9, 2025

Starting in 2026, the IRS will begin receiving direct reports of your crypto activity.
Here's what that means — and how to stay ahead of it.

Video Poster Image
Get Help With 1099-DA Reporting

What is the 1099-DA form?

The 1099-DA is a new tax form specifically for digital assets, similar to other 1099 forms. 


Its purpose is to report transactions involving the sale or transfer of digital assets to the IRS (IRS Section 6045).It covers taxable events like selling or transferring crypto, but not purchases, which are non-taxable.

Who Will Receive the IRS 1099-DA Crypto Form and When Will It Be Issued?

Who will receive a 1099-DA form?

Anyone who has sold or transferred digital assets from a centralized crypto exchange with a tie to the US (e.g., Coinbase, Kraken, Gemini, Uphold, Robinhood, Fidelity, Franklin Templeton, Swan) will receive a 1099-DA.

When will the 1099-DA forms start to be issued?

The first 1099-DA forms will be issued in January/February 2026, covering the 2025 tax year. This timeline is designed to gives exchanges sufficient time to comply (IRS Notice 2014-21).

Note: Decentralized finance (DeFi) users won’t receive 1099-DA forms yet, as DeFi platforms lack U.S. reporting infrastructure. However, regulatory trends (e.g., FinCEN’s crypto rules) suggest future oversight. 

Important: Just because you don’t receive a form doesn’t mean you're exempt from reporting. The tax responsibility still exists; the burden simply shifts to you to calculate and report all relevant activity.

What information will be reported on the 1099-DA?

For 2025 (issued 2026): The 1099-DA will report proceeds from sales and transfers, excluding cost basis (what you paid)

However, starting in 2027 (for the 2026):  It will include cost basis (if available) and list all trades, transfers, and wallet addresses.

*This means the IRS will see large transaction amounts without knowing if they were profitable. 

How Wallet Transfers Will Be Tracked

The IRS isn’t just tracking sales, it’s mapping the movement of your crypto through wallet transfers.

Here’s how that works in practice:

Flowchart titled 'CryptoTaxAudit 1099-DA Wallet Transfer Flowchart' showing the movement of Bitcoin across four steps: first, buying Bitcoin on Coinbase (marked 'Not taxable'); second, transferring it to a Ledger hardware wallet (labeled 'Tracked by 1099-DA'); third, sending it to Kraken exchange (noted 'Deposit tracked'); and fourth, selling the crypto (marked 'Sale reported even if cost basis is unknown'). Arrows connect each step from left to right.

Why it matters:


This level of tracking turns what used to be private peer-to-peer transfers into reportable, traceable events. For investors who frequently move assets, the 1099-DA becomes a surveillance tool one that requires precision reporting on your end to avoid misinterpretation.

Note: If you’re participating in our Safe Harbor Allocation Plan, this initiative was designed to align with the IRS’s new 1099‑DA reporting requirements, especially for documenting wallet transfers and cost basis calculations.

What are the risks of not reporting a 1099-DA on your tax return?


Failing to report a 1099-DA may trigger an IRS CP2000 notice, claiming unreported income and issuing a bill. Non-compliance could flag you for crypto tax underreporting, leading to audits or penalties.

How to Prepare for the 1099-DA

Simple Investors: 
If you trade on one exchange, cost basis is tracked, similar to stocks.

Complex Investors: 
Moving assets across exchanges or wallets complicates reporting.

Records: 
Keep detailed transaction records to ensure compliance. 

CryptoTaxAudit can help calculate your gains, especially if your situation is complex, and defend those numbers in the event of an IRS audit.

Need Help With Your 1099-DA?
Read More
Graphic titled '1099-DA Crypto Reporting: What the IRS Will Track in 2026,' with additional explanatory text reading, 'Think crypto isn’t taxed until you cash out? Think again. Swaps, staking, and stablecoins are all taxable—and costly if you get it wrong.' The image shows a man looking concerned while using a laptop displaying '1099-DA Unreported Income Detected.' Behind him, logos representing crypto platforms like Ethereum, Coinbase, and Ledger hover ominously, with the shadowy silhouette of an IRS agent looming in the background, emphasizing the serious consequences of inaccurate crypto tax reporting.
A graphic illustrating IRS cryptocurrency tracking through the 1099-DA form. The image depicts a shadowy figure standing in front of multiple high-tech digital screens displaying the text '1099-DA ACTIVE SCAN,' alongside warnings such as 'OFFSHORE ACTIVITY DETECTED AUDIT PENDING.' Diagrams and references to cryptocurrency exchanges like Coinbase, Ledger, and Kraken highlight how the IRS tracks private wallets and offshore crypto transactions. Accompanying text reads, 'How the 1099-DA Tracks Private Wallets and Offshore Crypto Activity — What the IRS Will See?' and includes branding for CryptoTaxAudit, labeled as 'The Crypto Tax & IRS Audit Experts.
A serious-looking man with glasses sits in a dark room illuminated by glowing computer screens displaying IRS audit warnings, including “AUDIT PENDING,” “IRS AUDIT,” “1099 DA,” and “Audit Letter.” Red surveillance drones hover above. The left side of the image contains bold text that reads: “1099-DA Updates: What Crypto Traders and Investors Need to Know Before 2026” Subtext: “Learn about Form 1099-DA, set to transform crypto tax reporting in 2026.” The image is branded with the CryptoTaxAudit logo and tagline: “The Crypto Tax & IRS Audit Experts.”
Split-screen image with a warning theme. On the left, bold text reads: “Crypto Traders and Investors: You’re Now Required to Keep Your Own Records,” followed by smaller text: “Learn how to document trades and protect yourself from audits.” On the right, a man sits hunched over a cluttered desk in a dim room filled with glowing monitors. A central screen displays the message: “CODE 6001 VIOLATION: RECORDS INSUFFICIENT. AUDIT COMMENCES IN: 06:13:45.” The setting includes IRS logos, blockchain charts, drones, and corrupted exchange servers labeled “Mt. Gox” and “FTX,” highlighting the urgency of proper crypto recordkeeping.
Frequently Asked Questions About 1099-DA: