For a decade, US crypto tax reporting has been almost entirely self-reported. Centralised exchanges have issued 1099-MISC forms for staking and rewards income above certain thresholds, but the disposal data on Form 8949 has been the customer's problem to assemble. The result has been the well-documented compliance gap: the 2023 TIGTA report estimated that virtual currency tax revenue was substantially under-collected because the IRS lacked third-party data to cross-check returns.
That changed with the final regulations on broker reporting issued in July 2024 under the authority of the Infrastructure Investment and Jobs Act. The new Form 1099-DA applies to dispositions of digital assets from 1 January 2025, with cost basis reporting kicking in from 1 January 2026.
This article walks through what 1099-DA contains, who is required to issue it, what the practical impact is for retail filers, and where the gaps remain.
What 1099-DA actually contains
The form is structurally similar to the 1099-B used for stocks. For each disposal during the tax year, the issuing broker reports:
- The taxpayer's name, address and TIN.
- The asset disposed of (name and CUSIP-equivalent identifier where available).
- The date of disposal.
- Proceeds of the disposal in USD.
- The acquisition date (from 2026 onward).
- The cost basis (from 2026 onward).
- The wash-sale loss disallowed (always blank for now, since the wash-sale rule does not apply to digital assets; reserved for future statutory changes).
- Whether the holding period was long-term or short-term (from 2026 onward).
- The accrued market discount (rare for crypto).
For 2025 disposals (the first year of mandatory reporting), only the proceeds and disposal date are required. From 2026, the cost basis and holding period join the form. This staged rollout gives brokers time to build the basis-tracking systems.
Who has to issue it
The final regulations define a "digital asset broker" as a person who, in the ordinary course of business, effects sales of digital assets for customers. The definition explicitly includes:
- Centralised crypto exchanges (Coinbase, Kraken, Binance.US, Gemini, etc.).
- Hosted wallet providers that facilitate sales.
- Operators of digital asset payment processors.
The definition explicitly excludes:
- Non-custodial wallet providers (MetaMask, Rabby, hardware wallet manufacturers).
- Validators and miners receiving block rewards.
- Decentralised exchange front-ends, for now (the Treasury issued separate proposed rules for DeFi brokers in late 2023 that have not been finalised; the political environment in 2025-26 has largely shelved this proposal).
The exclusion of DeFi is the largest gap in the new regime. A taxpayer who exclusively uses Uniswap, Aerodrome and similar decentralised venues will receive no 1099-DA for those activities. The self-reporting burden on those activities continues unchanged.
The practical impact for retail filers
Three concrete changes for the typical retail crypto investor filing for tax year 2025 onward:
1. The IRS will receive a parallel report. Every 1099-DA the broker sends to the customer is also sent to the IRS. Mismatches between the 1099-DA totals and the customer's Form 8949 will trigger automated CP2000 letters in the same way that 1099-B mismatches do for stock investors. The CP2000 letter is not an audit, but it is a request for explanation and adjustment.
2. The reconciliation work shifts. The customer's task is no longer to generate the disposal numbers from scratch; it is to confirm that the 1099-DA totals match what the customer's tax software produces, and to reconcile any differences. The most common sources of difference will be:
- Internal transfers misclassified by the broker as disposals.
- Cost basis on transferred-in coins (broker reports zero; customer's actual basis is whatever they paid at the source platform).
- Wash-style trades within DeFi that the broker did not see.
3. The cost-basis reporting from 2026 will be wrong for many customers. The broker can only know the cost basis of coins acquired on its platform. For coins transferred in from another wallet, the broker must report a missing or zero cost basis. The customer is then required to file Form 8949 with the corrected basis (using box B for "transactions reported on Form 1099-B for which basis was not reported"). The form is set up to handle this; the workflow is not new, but the volume of corrections will rise.
What this means for tax software
The arrival of 1099-DA reduces the data the tax tool needs to assemble from the customer's raw CSVs (because the broker is now producing a structured tax form), but increases the importance of reconciliation. A tool that takes the broker's 1099-DA at face value and accepts the zero cost basis on transfers will overstate the tax bill substantially.
The architecture our Crypto Tax Calculator uses for this is to ingest the raw transaction histories from each exchange (which carry the full provenance) and then reconcile against the 1099-DA at the summary level. Where the 1099-DA reports a cost basis the calculator can verify from the source CSV, the two should match. Where the 1099-DA reports zero (because the coin was transferred in), the calculator overrides with the corrected basis from the source platform. The exported Form 8949 uses the correct codes for each type of transaction.
The honest summary: the new reporting regime is a meaningful improvement in IRS data quality and an improvement in customer experience for the simple buy-and-hold case (the 1099-DA totals will often match the return with no work). For any customer who uses more than one exchange, transfers to a hardware wallet, or uses any DeFi venue, the reconciliation work remains and the tool you use still matters.