IRS Form 1099-DA Cost Basis Reporting in 2026: What Changed and What to Do

Last updated: September 29, 2026 · Reviewed by the CryptoTaxAI editorial team · 9 min read

The IRS's digital asset broker reporting regime has entered its second phase. In early 2026, brokers sent the first wave of Form 1099-DA, reporting gross proceeds from 2025 sales. For 2026 sales, brokers must also report cost basis — but only for a narrowly defined subset of transactions. Understanding the difference now, before the forms arrive in early 2027, is the difference between a calm filing season and a scramble.

1. The two-phase rollout: what brokers report and when

The reporting rules were phased in over two years. Brokers have been required to report gross proceeds — the total amount received from selling or exchanging crypto, before costs or fees — for digital asset sales effected on or after January 1, 2025. Those forms were furnished to taxpayers in early 2026.

Beginning with sales effected on or after January 1, 2026, the rules expand: brokers must report gross proceeds for all digital asset sales and basis information for digital assets that are covered securities. Basis reporting for noncovered securities remains voluntary.

2. Covered vs. noncovered: the definitions that decide your form

For Form 1099-DA purposes, a covered security is a digital asset that meets all of these conditions:

• It was acquired after 2025;
• It was acquired in an account for which the broker provided custodial services; and
• It was held in that account until the broker effected the disposition.

Everything else is a noncovered security. The IRS lists the categories explicitly: any digital asset the broker did not provide custodial services for when it was acquired; any digital asset acquired before 2026; and any digital asset transferred in to the broker providing custodial services. Brokers are not required to report basis for noncovered securities (though they may do so voluntarily, checking box 9 to indicate noncovered status).

The practical upshot: if you bought crypto on an exchange this year and sold it on that same exchange without moving it, your basis will likely be reported. If you held anything from before 2026, moved coins between exchanges, or withdrew to self-custody and redeposited, those dispositions will generally arrive with proceeds only.

3. Why your 1099-DA may show proceeds with no cost basis

This is the gap tax professionals have been warning about. A broker that never saw your original purchase cannot reliably know your basis — so the law does not ask it to guess. The most common reasons for a blank basis box:

• Transfers between platforms. Coins bought on one exchange and sold on another carry no basis with them. The IRS has confirmed there is currently no mechanism for broker-to-broker basis transfer statements, unlike the transfer-statement system that exists for stocks.
• Self-custody withdrawals. Withdrawing coins to a hardware wallet and later redepositing them to sell means the broker receives a deposit with no acquisition history. Under the 2026 instructions, the broker treats those coins as noncovered — proceeds reported, basis left to you.
• Pre-2026 acquisitions. Everything acquired before January 1, 2026 is noncovered by definition, so long-term holders will see proceeds-only reporting for years.

Expect this: your forms will be accurate about what you sold for, and often silent about what you paid. The gain calculation is still yours to complete.

4. What to do when the basis box is blank

The IRS's guidance to recipients is direct: you must calculate basis before you file your tax return. A blank basis field does not mean you have zero basis — and treating it that way would mean paying tax on the full proceeds as if you had no cost at all.

• Reconcile every 1099-DA on Form 8949. Each sale or exchange goes on Form 8949 (summarized on Schedule D), with the broker's proceeds on one side and your own documented basis on the other. Our Form 8949 guide walks through the mechanics.
• Reconstruct basis from your own records. Exchange export files, bank statements showing fiat deposits, blockchain explorers, and your tracker history are the raw material. Rebuild per-lot acquisition data rather than guessing.
• Keep wallet-by-wallet records. The final regulations ended universal accounting and require wallet-by-wallet tracking. Do not blend acquisitions across wallets and platforms in your calculations.
• If the form is wrong, ask the issuer for a corrected form — the IRS says not to contact the IRS itself about 1099-DA errors, and not to wait to file your taxes while sorting it out. Keep copies of everything.

5. What is still not reported on Form 1099-DA

Several categories of activity stay outside broker reporting entirely — which means the forms you receive will never be a complete picture of your taxable crypto activity:

• Non-custodial and decentralized activity. The regulations do not apply to decentralized or non-custodial crypto exchanges that do not take possession of the digital asset being sold. Activity on those platforms is still taxable, but no 1099-DA is generated.
• Staking, wrapping, and lending. Several transaction types — including staking rewards, wrapping, and lending — remain temporarily exempt from broker reporting. No form does not mean no filing obligation: rewards are still income you must report.
• DeFi reporting obligations. The DeFi broker reporting rules were repealed, limiting Form 1099-DA information reporting to custodial brokers. DeFi participants' underlying tax liability is unaffected — only the third-party reporting obligation was removed.

6. Stablecoins and de minimis exceptions

The 2026 instructions also define qualifying stablecoins — digital assets designed to track a fiat currency one-to-one, using an effective stabilization mechanism, and generally accepted as payment. Brokers using the optional reporting method for qualifying stablecoins are not required to report designated sales of those stablecoins when the customer's aggregate gross proceeds do not exceed $10,000 for the year.

Two other de minimis thresholds govern whether a broker reports at all (not what is taxable on your return): sales of specified NFTs need not be reported when aggregate gross proceeds do not exceed $600 for the year, and processors of digital asset payments are not required to report sales of $600 or less for the year.

7. Your action checklist before forms arrive

Brokers will furnish 2026-tax-year statements in early 2027. Before then:

1. Export everything now. Download transaction histories from every exchange and wallet you used in 2026 while the data is still easily accessible.
2. Reconcile transfers. Match withdrawals with deposits across platforms so transfers are never misclassified as sales.
3. Pin down basis per wallet. For each disposition, know which wallet the coins were acquired in and what you paid, including fees.
4. Run an estimate. Our free crypto tax calculator gives you a 2026 estimate from your own numbers — before the forms make your proceeds feel official and your basis feel optional.
5. Consider harvesting losses. If you have losing positions, year-end is when loss harvesting still works. See our tax-loss harvesting estimator.

Sources

• IRS: Instructions for Form 1099-DA (2026)
• IRS: Understanding your Form 1099-DA
• Coinbase: A Beginner's Guide to New U.S. Crypto Tax Rules

Keep learning

• How to Report Crypto Taxes
• Form 8949: The Complete Guide
• Cost Basis Methods: FIFO, LIFO, Specific ID
• Record-Keeping Best Practices
• 7 Common Crypto Tax Mistakes
• Free Crypto Tax Calculator