If you bought and sold crypto in the last year, this is one IRS tax update that could change how you prepare your return.
As crypto adoption expanded over the past decade, one challenge remained: how the IRS tracks and taxes crypto activity. For years, digital asset reporting was often inconsistent, confusing, and frustrating for taxpayers, often involving spreadsheets, fragmented data from multiple exchanges, and guesswork on cost basis.
That’s changing in a major way.
For the 2025 tax year, filed in 2026, the IRS rolled out a new information return: Form 1099-DA. Whether you’re a seasoned crypto investor or someone who dipped their toes in the crypto markets last year, understanding Form 1099-DA and what it entails is important because it may apply to you.
What is the IRS Form 1099-DA?
Form 1099-DA stands for Digital Asset Proceeds From Broker Transactions. It is the IRS’s first tax form designed specifically to report digital asset sales and exchanges. Think of it as the crypto equivalent of Form 1099-B, which brokers use to report stock and securities trades.
Under IRS rules, crypto platforms like exchanges are required to issue Form 1099-DA for certain transactions that occurred on or after January 1, 2025. Forms are sent to taxpayers and the IRS during the 2026 tax season.
The goal is simple: standardize digital asset reporting across the industry, giving both taxpayers and the IRS a clear, uniform trail of taxable activity. Before Form 1099-DA, crypto tax reporting lacked consistency, with some platforms issuing miscellaneous forms, others providing limited export data, and many leaving taxpayers to reconcile complex transactions on their own.
If you were involved in crypto during its early adoption, you likely remember how challenging tax reporting could be. But lucky for you, times have changed and the industry has evolved.
Why Crypto Reporting Changed
Form 1099-DA represents a structural change in how crypto activity is documented and verified by the IRS. There are three main reasons the IRS introduced Form 1099-DA.
1. Consistency Across Platforms
Previously, crypto tax data was fractured across exchanges and wallet providers, without a single standard format. Some platforms reported activity on miscellaneous forms, while others didn’t report at all, which made tax compliance inconsistent and error-prone. As a result of that, Form 1099-DA standardizes reporting.
2. Better Third-Party Reporting for the IRS
The IRS has historically struggled to match self-reported crypto transactions with third-party data, a mismatch that leads to underreporting, discrepancies, and notices after taxpayers file. By requiring companies to report transactions directly to the IRS, the agency gets the same data taxpayers receive, reducing mismatches and error risk.
3. Greater Transparency, More Accountability
Digital assets have been treated in tax filings like property, meaning any sale or exchange can trigger a capital-gains event. But self-reporting was common. With 1099-DA, taxable events like sales and exchanges will show up on a uniform form, giving taxpayers a clearer roadmap for reporting and reducing the likelihood of omissions.
Key Information Reported on Form 1099-DA
When issued, Form 1099-DA provides detailed information about your digital asset transactions. Reported information typically includes:
- Gross proceeds from digital asset sales and exchanges.
- Transaction dates from when you bought and sold an asset.
- Asset type (e.g., Bitcoin, Ethereum, NFTs) and quantity.
- Fair market value at the time of each transaction.
- Cost basis and gain or loss information, though for tax year 2025 reporting (forms issued in 2026), brokers generally are not required to report cost basis. That requirement expands for assets acquired in 2026 and beyond.
- Broker details include name, taxpayer identification number (TIN), and contact info.
Mandatory cost basis reporting is scheduled to phase in for digital assets acquired on or after January 1, 2026, meaning future tax years will have more complete information included on the form.
Who is Affected
Who Issues Form 1099-DA
Brokers and platforms defined as digital asset brokers by the IRS must issue Form 1099-DA. This includes:
- Centralized crypto exchanges.
- Digital asset payment processors that facilitate sales or redemptions.
- Hosted wallet providers that custody customer assets.
- Other intermediaries that affect digital asset sales for customers.
These entities must provide Form 1099-DA to investors and also file the same information with the IRS in early 2026.
Who Receives Form 1099-DA
You’ll likely receive a Form 1099-DA in early 2026 if, during the 2025 tax year, you:
- Sold crypto for cash.
- Exchanged one digital asset for another.
- Sold NFTs through a platform that qualifies as a broker.
- Redeemed digital assets for goods or services through a broker.
You might not receive a 1099-DA if you only held assets, moved crypto between your own wallets, or engaged in certain DeFi activities not handled by a broker, but that doesn’t eliminate your tax reporting obligations. You’re still responsible for reporting taxable events on your tax return, even without a form.
Common Crypto Transactions and Whether They Trigger Form 1099-DA
Not every move you make in crypto will automatically result in a 1099-DA. Here’s how different activities are treated:
Taxable Events (Likely Reported)
- Selling crypto for fiat currency
- Exchanging a crypto asset for another crypto asset
- Using crypto in a broker-facilitated payment
Non-Taxable or Not Reported on 1099-DA (but still may be reportable by you)
- Transferring assets between your own wallets (no sale)
- Buying crypto (not a taxable event)
- Earning rewards, staking yield, mining income (may require other forms)
Even if you don’t get a Form 1099-DA, you are still legally required to report taxable events on your tax return such as capital gains, losses, or ordinary income, as required by law.
Buy and Sell Crypto with iTrustCapital
iTrustCapital gives investors multiple ways to gain exposure to crypto, depending on how and where they want to invest. With the Premium Custody Account, investors can buy and sell dozens of cryptocurrencies 24/7, including Bitcoin, Ethereum, Solana, XRP, Sui, and more.
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Disclaimer
This article is for informational purposes only and is not intended to constitute investment or tax advice in any way or constitute an offer to buy or sell any digital asset, cryptocurrency, or security or to participate in any investment strategy.
iTrustCapital is a fintech software platform for alternative assets. TrustCapital is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular digital asset, precious metal or investment strategy.
Investing in any digital asset or cryptocurrency (including meme coins) carries significant risks due to their speculative and highly volatile nature. Past performance is not an indication of future results. No investment is completely risk-free, and every investment carries the potential for losing some or all of the principal amount invested. Digital assets and cryptocurrencies are not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner.
Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Conduct your own research and consult with a qualified legal, investment, or tax professional to assess your own risk tolerance prior to investing.
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