Key Takeaways
- • Brokers were not required to report cost basis on Form 1099-DA for sales effected in 2025, leaving holders to reconstruct purchase costs from their own records when filing 2025 returns due October 15, 2026.
- • The 2025 Form 8949 instructions added digital-asset boxes G through L, with box H or K used when a 1099-DA showed no basis and box I or L used when no broker statement arrived.
- • Basis reporting becomes mandatory for covered digital-asset sales on or after January 1, 2026, but only for coins acquired after 2025 in a custodial account and held there until sale; transferred-in and pre-2026 coins remain noncovered.
- • Staking, wrapping, liquidity-provider and lending transactions were excluded from 1099-DA reporting under Notice 2024-57 and are reported on Form 1099-MISC where thresholds are met, with the 2026 payer threshold set at $2,000.
- • The 2024 draft broker definition, which covered kiosks, hosted and unhosted wallets and an estimated 13 million to 16 million owners, was narrowed by the July 2024 custodial-broker final regulations (T.D. 10000) and the April 2025 repeal of the DeFi rule via H.J.Res.25.
Summary
Anyone who took the automatic extension on a 2025 federal return must file by Thursday, October 15, 2026. For holders who sold crypto through an exchange in 2025, this is the first return built around Form 1099-DA, the broker statement the IRS required for digital-asset transactions on or after January 1, 2025. Any tax owed was due in April 2026; the extension only moved the filing date.
The first-year form left a central gap. The instructions for Form 1099-DA dated May 30, 2025 stated that brokers were "not required to report basis information with respect to sales effected in 2025," although they could report it voluntarily without penalty under sections 6721 or 6722. As a result, reporting varied by broker. Coinbase's tax-forms explainer said it would report gross proceeds only for tax year 2025. The IRS posted corrections to the 2025 instructions on January 7, 2026, addressing de minimis rules and optional reporting methods after the tax year had closed.
Holders must reconcile this on Form 8949, which now includes boxes G, H and I for short-term digital-asset sales and J, K and L for long-term sales. Filers are directed not to use boxes C or F for digital assets. A 1099-DA without basis points to box H or K, while no broker statement points to box I or L. The instructions define basis broadly as "the cost to acquire the digital asset, including transaction fees, commissions, transfer taxes, and other acquisition costs," and where box 6 carries code X, filers are told to "use your own records." Any sale reported on a 1099-DA also requires a yes answer to the digital-asset question on the front of Form 1040.
Transfers in from other wallets or exchanges present the largest records challenge. Brokers report the number of transferred-in units in box 12a and the transfer-in date in box 12b, but neither box shows original cost. Mandatory basis reporting applies only to covered securities, meaning digital assets acquired after 2025 in a custodial account and held there through sale. Earlier or transferred-in coins remain noncovered and are flagged in box 9. Blockchain explorers show movement but not purchase price, so holders are advised by the IRS digital-asset guidance to keep purchase, receipt, sale and disposition records.
Not all 2025 crypto income appeared on a 1099-DA. Under Notice 2024-57, brokers need not file information returns on staking, wrapping, liquidity-provider or lending transactions until further Treasury and IRS guidance. Coinbase said customers earning more than $600 in crypto for 2025 would receive a Form 1099-MISC. For payments made in 2026, the Box 3 filing threshold for other income and prizes is $2,000, subject to future inflation adjustments.
The final framework was narrower than the 2024 draft, which asked brokers to identify whether they were kiosk operators, payment processors, or hosted or unhosted wallet providers and included a wallet address field. Industry advocates had argued at a November 2023 hearing that the proposed definition stretched the statute "beyond the breaking point." The IRS estimated 13 million to 16 million affected owners and up to 9,500 brokers. The final custodial-broker regulations (T.D. 10000) were published July 9, 2024, and a December 2024 DeFi reporting rule was undone by H.J.Res.25, signed by President Trump on April 10, 2025, according to the Ways and Means Committee. Consequently, a self-custodied decentralized-exchange swap generally produced no 1099-DA for 2025.
Basis reporting begins with 2026 sales. Coinbase has said its 2026 forms will show cost basis alongside gross proceeds, and the 2026 instructions reference Notice 2025-33 for transitional backup withholding relief. Holders must still reconcile broker-reported basis against their purchase logs, including fees, and confirm that their selected lot method, such as HIFO, LIFO or FIFO, aligns across records. Returns filed this week remain on the 2025 forms and their basis gap. The first 1099-DA with broker-reported basis covers tax year 2026 and is expected in early 2027.
The first-year form left a central gap. The instructions for Form 1099-DA dated May 30, 2025 stated that brokers were "not required to report basis information with respect to sales effected in 2025," although they could report it voluntarily without penalty under sections 6721 or 6722. As a result, reporting varied by broker. Coinbase's tax-forms explainer said it would report gross proceeds only for tax year 2025. The IRS posted corrections to the 2025 instructions on January 7, 2026, addressing de minimis rules and optional reporting methods after the tax year had closed.
Holders must reconcile this on Form 8949, which now includes boxes G, H and I for short-term digital-asset sales and J, K and L for long-term sales. Filers are directed not to use boxes C or F for digital assets. A 1099-DA without basis points to box H or K, while no broker statement points to box I or L. The instructions define basis broadly as "the cost to acquire the digital asset, including transaction fees, commissions, transfer taxes, and other acquisition costs," and where box 6 carries code X, filers are told to "use your own records." Any sale reported on a 1099-DA also requires a yes answer to the digital-asset question on the front of Form 1040.
Transfers in from other wallets or exchanges present the largest records challenge. Brokers report the number of transferred-in units in box 12a and the transfer-in date in box 12b, but neither box shows original cost. Mandatory basis reporting applies only to covered securities, meaning digital assets acquired after 2025 in a custodial account and held there through sale. Earlier or transferred-in coins remain noncovered and are flagged in box 9. Blockchain explorers show movement but not purchase price, so holders are advised by the IRS digital-asset guidance to keep purchase, receipt, sale and disposition records.
Not all 2025 crypto income appeared on a 1099-DA. Under Notice 2024-57, brokers need not file information returns on staking, wrapping, liquidity-provider or lending transactions until further Treasury and IRS guidance. Coinbase said customers earning more than $600 in crypto for 2025 would receive a Form 1099-MISC. For payments made in 2026, the Box 3 filing threshold for other income and prizes is $2,000, subject to future inflation adjustments.
The final framework was narrower than the 2024 draft, which asked brokers to identify whether they were kiosk operators, payment processors, or hosted or unhosted wallet providers and included a wallet address field. Industry advocates had argued at a November 2023 hearing that the proposed definition stretched the statute "beyond the breaking point." The IRS estimated 13 million to 16 million affected owners and up to 9,500 brokers. The final custodial-broker regulations (T.D. 10000) were published July 9, 2024, and a December 2024 DeFi reporting rule was undone by H.J.Res.25, signed by President Trump on April 10, 2025, according to the Ways and Means Committee. Consequently, a self-custodied decentralized-exchange swap generally produced no 1099-DA for 2025.
Basis reporting begins with 2026 sales. Coinbase has said its 2026 forms will show cost basis alongside gross proceeds, and the 2026 instructions reference Notice 2025-33 for transitional backup withholding relief. Holders must still reconcile broker-reported basis against their purchase logs, including fees, and confirm that their selected lot method, such as HIFO, LIFO or FIFO, aligns across records. Returns filed this week remain on the 2025 forms and their basis gap. The first 1099-DA with broker-reported basis covers tax year 2026 and is expected in early 2027.
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