If you sold a single token on Coinbase, Kraken, or any U.S. exchange last year, a new tax form is about to land in your inbox: Form 1099-DA. For the first time in crypto's history, the IRS will see a copy of your trades from the broker. And starting January 1, 2026, those forms will include cost basis numbers — numbers that may not match what your portfolio tracker has been calculating.
The mismatch is not a glitch. It is the predictable result of two intersecting rule changes: the new broker reporting regime under the final digital asset regulations, and the death of the "universal wallet" accounting method that most crypto investors have relied on for years. Get this wrong, and you can quite literally pay capital gains tax on coins you already paid tax on.
This guide walks through what Form 1099-DA actually reports, why per-wallet cost basis is now mandatory, how the Rev. Proc. 2024-28 safe harbor lets you clean up old basis lots before the new regime takes hold, and the practical steps to reconcile broker reports against your own records without overpaying.
What Form 1099-DA Is — and What It Is Not
Form 1099-DA, "Digital Asset Proceeds from Broker Transactions," is the crypto cousin of Form 1099-B. Centralized exchanges, custodial trading platforms, certain hosted wallet providers, and (later) some payment processors must file one with the IRS — and send a copy to you — for every reportable digital asset sale or exchange.
Reportable transactions include:
- Crypto-to-fiat sales (selling BTC for USD).
- Crypto-to-crypto trades (swapping ETH for SOL).
- Crypto used to pay for goods or services through a broker.
- Stablecoin redemptions above the de minimis threshold.
- Sales of specified NFTs above the de minimis threshold.
The form reports gross proceeds, the date of disposition, a description of the asset (with ticker and units), and — beginning with 2026 transactions — the acquisition date and cost basis for "covered" assets.
What it does not do
Form 1099-DA is not a tax return. It does not tell you whether a transaction was long-term or short-term. It does not capture transfers between your own wallets, mining or staking income, airdrops, hard forks, or DeFi yield. And it definitely does not know about anything held in a self-custody wallet that never touches an exchange.
You still owe accurate reporting on Form 8949 and Schedule D regardless of what the 1099-DA says — or omits.
The Two-Year Phase-In: Gross Proceeds Now, Cost Basis Next
The IRS staggered the new rules to give brokers — and customers — time to catch up.
Tax year 2025 (forms issued in early 2026): Brokers report gross proceeds only. They do not have to fill in cost basis, acquisition date, or character of gain (short vs. long). The standard 1099 deadline of January 31 was extended; brokers had until February 17, 2026, to deliver the first batch of these forms.
Tax year 2026 (forms issued in early 2027): Brokers must report cost basis and acquisition date on Form 1099-DA — but only for "covered" digital assets, meaning units acquired in the same broker's account on or after January 1, 2026, and held there continuously until sale.
That single word — covered — is the source of most of the confusion that lies ahead. A coin you bought on an exchange in 2022 and sold in 2026 is not covered. The broker will report your proceeds but leave basis blank. You have to bring your own number.
Notice 2024-56 transition relief
The IRS knows the rollout is messy. Notice 2024-56 promises that the agency will not impose penalties on brokers who make a "good faith effort" to file correct and timely 1099-DAs for 2025 transactions, and it provides broad relief from backup withholding for 2026 transactions where the broker has matched the customer's name and TIN through the IRS TIN-matching program. Good news for exchanges — but it does not relieve you of the obligation to report your gains correctly.
The End of Universal Accounting
For years, most crypto tax software let you pick a "universal" or "global" cost basis pool: all of your BTC across every exchange and wallet was treated as one stack, and you could specifically identify which lot you sold from that combined stack. It was simpler, it usually produced the best tax answer, and it was — depending on how strictly you read the rules — never really sanctioned by the IRS.
In Rev. Proc. 2024-28, the IRS officially closed the door. Effective January 1, 2025, taxpayers must allocate cost basis on an account-by-account or wallet-by-wallet basis. Each broker account, each self-custody wallet, and each on-chain address is its own separate pool. You cannot reach into your Kraken stack to pull out a high-basis lot to offset a sale on Coinbase.
This sounds like a paperwork change, but its tax impact is real. Imagine you bought 1 BTC on Coinbase at $20,000 in 2022 and another 1 BTC on Kraken at $60,000 in 2024. You sell the Coinbase BTC for $70,000 in 2026:
- Under universal accounting, with Specific ID, you could "use" the $60,000 Kraken basis and report a $10,000 gain.
- Under the new per-account rule, the Coinbase sale must use Coinbase-bought basis. Your gain is $50,000.
Three times the taxable gain. Same economic transaction.
Rev. Proc. 2024-28 Safe Harbor: Your One-Time Reset Button
Because so many investors held positions purchased under the old universal regime, the IRS offered a one-time safe harbor to redistribute "unused basis" — basis attached to coins you bought but have not yet sold — across your accounts as of January 1, 2025.
You had two methods to choose from:
Specific unit allocation. You identify each individual unit of unused basis (acquisition date and cost) and assign it to a specific remaining unit in a specific wallet. This produces the most precise outcome and the strongest audit defense, but it requires meticulous records.
Global allocation. You establish a written rule before January 1, 2025 — for example, "highest basis first, allocated within each wallet alphabetically" — and the rule determines how unused basis flows into each pool of remaining assets.
Either way, the safe harbor:
- Applies one time only and is irrevocable.
- Must be completed before the earlier of your first 2025 digital asset sale or your tax return due date (including extensions). For global allocation, the written rule had to exist by January 1, 2025.
- Requires each type of digital asset to be treated separately — you cannot offset BTC basis against ETH basis.
- Demands that the number of unused basis units match the number of remaining digital asset units in your accounts on January 1, 2025.
If you missed the deadline and never made an allocation, the consequences land harder when broker basis reporting kicks in for 2026. Coins on an exchange that were acquired before 2026 are not covered, so the broker will not report basis — meaning the burden of proving basis falls entirely on you, and the IRS may default to assuming a zero basis if your records are weak.
How to Reconcile 1099-DA Numbers Against Your Own Records
Once you receive a 1099-DA, treat it like a 1099-B from a stockbroker: useful, but not authoritative until you check it.
Step 1: Verify the gross proceeds
For each line, match the proceeds amount to your transaction history on the exchange. Discrepancies usually come from:
- Trading fees treated inconsistently (some brokers report gross, others net).
- Wash trades, internal transfers, or test transactions that should not have been included.
- Crypto-to-crypto trades where the broker valued the "received" asset at a different time than your records.
Step 2: Check the asset description and acquisition date
Broker reports often mislabel forks, wrapped tokens, or rebranded assets. An "acquired" date that reflects a transfer-in rather than the original buy can also push a position from long-term to short-term — a 20-point swing in federal rates for high earners.
Step 3: Determine covered vs. non-covered
For 2026 sales of assets acquired in 2026 in the same account, the broker should report basis. For everything else, the basis column will be blank. Anything blank is your job to fill in on Form 8949.
Step 4: Add in the things the broker did not see
The 1099-DA only covers broker transactions. You must still report:
- Self-custody sales and swaps (Uniswap, Aerodrome, etc.).
- Staking and lending rewards (ordinary income).
- Airdrops and hard forks (ordinary income at fair market value).
- Crypto received as wages, freelance income, or business payments.
- Mining (ordinary income; self-employment if a trade or business).
Step 5: Reconcile transfers
Movements between your own wallets are not taxable, but brokers may report a transfer out without seeing it land in. That can look like a disposition with no offsetting basis. Keep transfer receipts, transaction hashes, and screenshots showing the same wallet on both ends.
Special Cases Worth Flagging
Stablecoins and the de minimis threshold
Routine in-kind redemptions of "qualifying stablecoins" — pegged 1:1 to the U.S. dollar, redeemable on demand at par — get a de minimis exception so you do not get a 1099-DA for every $40 USDC swap. The exception comes with thresholds and reporting nuances; if you run a high-volume stablecoin operation, talk to a CPA about whether aggregated reporting applies to you.
NFTs
Specified NFTs above the de minimis threshold (currently set so most casual sales are covered) get reported on 1099-DA. NFTs sold by peer-to-peer marketplaces that do not meet the broker definition may not produce a 1099-DA at all — but the income is still taxable to you.
Wrapped tokens, bridges, and DeFi
The current 1099-DA regime applies primarily to custodial brokers. Decentralized exchanges and self-custody wallets are subject to a separate, delayed framework. Until that framework lands, treat DeFi as the wild west: keep your own records, because nobody else is keeping them for you.
Businesses paying in or receiving crypto
Businesses that accept crypto as payment are not exempt. If a customer pays you in BTC, you have two reportable events on your books: revenue at the fair market value on the date of receipt, and a capital gain or loss when you later sell or spend that BTC. Accurate bookkeeping at the moment of receipt — not at year-end — is what keeps these clean.
Practical Steps Before the 2026 Filing Season
- Pull all of your 1099-DAs early. Centralized exchanges may post them in account statements before they mail them. Get them, save them as PDFs, and tag them by tax year.
- Export raw trade history from every exchange in CSV. You will need this to reconcile against the 1099-DA — and to compute basis the broker did not report.
- Confirm whether you completed a Rev. Proc. 2024-28 allocation. If yes, document which method, the written rule (if global), and the per-asset, per-wallet allocation. If no, recognize that your pre-2025 lots now sit in whichever wallet you actually held them in on January 1, 2025 — and prepare to defend that mapping.
- Lock in a single accounting method per wallet. FIFO is the IRS default; Specific ID is allowed if you identify the units sold contemporaneously — meaning at or before the time of sale, with adequate records. Choose one and stick with it consistently within each wallet.
- Reconcile aggressively. If you transferred BTC from Coinbase to a self-custody wallet in 2024 and then back to Coinbase in 2026 before selling, that BTC is not a "covered" asset on Coinbase. The broker will show proceeds with no basis. You need the original purchase record.
- Plan around backup withholding. Brokers must backup withhold at 24% on certain unreported or mismatched transactions starting in 2026. Make sure your TIN is on file with every exchange you use.
Why Plain-Text Records Beat the Spreadsheet Trap
The single hardest part of getting crypto taxes right under the new rules is not the math — it is the records. Every wallet, every exchange, every protocol speaks a slightly different dialect. Transaction CSVs come and go as exchanges shut down or change ownership. Portfolio trackers compute basis differently and often disagree by hundreds or thousands of dollars on the same trade.
A version-controlled, plain-text ledger of every transaction — one that you actually own — gives you something a SaaS dashboard cannot: a permanent, auditable, machine-readable history you can replay against any new IRS rule, any new exchange format, or any new accounting method. When the IRS asks you to defend a 2022 lot four years from now, you do not want to log into a dashboard that no longer exists. You want a text file with the receipts.
Keep Your Crypto Books Audit-Ready from Day One
Form 1099-DA closes the gap between the IRS and the broker — but the gap between the broker and you is still yours to manage. The investors and businesses who weather this transition cleanly will be the ones whose own records are complete enough to reconcile every line, fill in every blank basis column, and pass an IRS notice without breaking a sweat. Beancount.io provides plain-text accounting that is transparent, version-controlled, and AI-ready — so your crypto transaction history is yours, forever, and in a format you can audit yourself. Get started for free and turn the next tax season into a reconciliation, not a fire drill.