What is Form 1099-DA, and when does it apply?
Form 1099-DA is an IRS information return
used by certain brokers to report
digital asset transactions, including
reportable cryptocurrency sales
and exchanges.
Broker reporting generally began for
transactions occurring in 2025,
with forms furnished in 2026.
For transactions beginning in 2026,
certain covered digital assets are
also subject to broker cost basis
reporting requirements.
The applicable reporting obligations
depend on the transaction, broker,
asset, and tax year.
Does Form 1099-DA report my
cryptocurrency cost basis?
Not always. For reportable transactions
in 2025, brokers generally were not
required to report cost basis.
Beginning with transactions in 2026,
basis reporting applies to certain
covered digital assets, subject
to the applicable rules.
Assets acquired before the covered
asset rules apply, transferred from
another platform, or classified as
noncovered may not have reportable
basis information.
Taxpayers remain responsible for
determining and substantiating
the correct basis used on their
tax returns.
Why does my Form 1099-DA show
proceeds but no cost basis?
A Form 1099-DA may report gross
proceeds without basis because
the transaction occurred before
covered-basis reporting began,
the asset is noncovered, or the
broker does not have the required
acquisition information.
This frequently affects cryptocurrency
purchased years earlier or transferred
between exchanges and self-custody
wallets.
Missing broker-reported basis does
not automatically mean the taxpayer's
actual cost basis is zero. Historical
acquisition records and supporting
documentation may establish the
appropriate amount.
What should I do if my
Form 1099-DA is incorrect?
Compare the form against your
exchange statements, transaction
history, wallet records, and
existing tax-lot accounting.
Common discrepancies include
incorrect proceeds, transactions
attributed to the wrong reporting
period, missing basis information,
or movements that require further
classification.
Where the broker's reported information
is incorrect, contact the broker
about a corrected form. Separately,
retain supporting records and evaluate
the proper treatment on your tax
return, including applicable
reporting adjustments.
What happens if my tax return
differs from my Form 1099-DA?
Differences between broker-reported
information and a tax return may
require explanation or supporting
documentation. The IRS can use
information returns in its
compliance processes, but a
discrepancy does not automatically
establish that the tax return
is incorrect.
The appropriate response depends
on whether the difference involves
gross proceeds, cost basis,
transaction classification,
or another reporting item.
Camuso CPA reconciles the underlying
records and prepares supporting
workpapers for the applicable
tax treatment and reporting
adjustments.
How are cryptocurrency transfers
between exchanges handled?
Moving cryptocurrency between
wallets or accounts owned by
the same taxpayer generally
does not itself create a
taxable sale or exchange.
However, these transfers can
create gaps in a receiving broker's
basis records. The broker may
know when assets arrived without
knowing their original acquisition
costs or holding periods.
Proper reconciliation traces the
movement, distinguishes transfers
from taxable transactions, and
maintains cost basis continuity
across the relevant accounts.
Does Form 1099-DA include my
DeFi and self-custody transactions?
Not necessarily. A Form 1099-DA
generally reflects transactions
reportable by the particular broker.
It is not a complete statement
of all cryptocurrency activity
across a taxpayer's wallets,
decentralized protocols,
or other platforms.
DeFi transactions, self-custody
activity, staking rewards,
and transactions occurring
outside the reporting broker
may require separate accounting
and tax analysis.
Receiving one or more Forms
1099-DA does not eliminate the
taxpayer's obligation to report
other taxable digital asset activity.
Do I need full cost basis
reconstruction to reconcile
Form 1099-DA?
Not always. Some discrepancies
can be resolved through targeted
transaction reconciliation,
recovery of missing acquisition
records, or corrections to
existing tax-lot accounting.
More extensive historical
reconstruction may be necessary
when records are incomplete
across multiple years, assets
have moved among platforms,
or prior accounting errors
affect current holdings.
Camuso CPA evaluates the scope
of the recordkeeping problems
before determining whether
targeted corrections or a
comprehensive reconstruction
engagement is appropriate.
How does Rev. Proc. 2024-28
affect historical crypto
basis records?
Rev. Proc. 2024-28 established
a conditional safe harbor for
allocating unused digital asset
basis to wallets or accounts
as of January 1, 2025.
It addresses the transition
from certain historical basis
tracking practices to
wallet- or account-specific
identification requirements.
Taxpayers must evaluate whether
they qualify for the safe harbor
and whether their historical
accounting records support
the allocation method used.
The revenue procedure does
not automatically resolve
missing acquisition records,
historical reporting errors,
or discrepancies appearing
on Forms 1099-DA.
Can Camuso CPA reconcile multiple
Forms 1099-DA and prepare
my tax return?
Yes. Camuso CPA works with
investors receiving Forms
1099-DA from multiple brokers,
particularly when their
portfolios also include legacy
acquisitions, wallet transfers,
DeFi activity, or incomplete
cost basis records.
Our work may include broker
statement reconciliation,
historical transaction analysis,
supporting tax workpapers,
and individual or business
tax return preparation.
Accounting and tax preparation
can be included in one engagement
or structured separately,
depending on the client's
needs and existing advisers.
