2026 Form 1099-DA: What Changed for Crypto Cost Basis?

If you sold crypto in 2025, a Form 1099-DA probably arrived early this year showing what you sold for and nothing about what you paid. That gap is a major source of crypto tax anxiety right now, and 2026 is the year it starts to close.

Form 1099-DA cost basis reporting becomes mandatory for brokers on certain transactions effected on or after January 1, 2026. The word carrying the weight in that sentence is “certain.” A large share of the crypto people actually hold will not qualify, so the statement arriving in early 2027 will still have blanks in it.

This guide covers what changed, how to tell which of your assets your broker must price and which it will not, how to read the two boxes that decide the answer, and what to do with the gaps that remain.

Quick Answer

Starting with transactions on or after January 1, 2026, brokers must report cost basis on Form 1099-DA, but only for digital assets that are covered securities. A digital asset is covered only if you acquired it after 2025 inside an account where the broker provided custodial services and it stayed in that account until the broker effected the disposition. Everything else, including coins bought earlier or transferred in from a wallet, is noncovered. For those, Box 1g may be blank and your own records determine basis.

Key Takeaways

• Basis reporting starts, but not for everything. Brokers must report basis on certain transactions effected on or after January 1, 2026, for digital assets that are covered securities.
• Covered is narrower than it sounds. Three conditions all have to hold: acquired after 2025, acquired in a custodial account at that broker, and held in that account until the disposition.
• Transfers break coverage. An asset that moved in from self-custody or another platform is generally noncovered, even if you bought it in 2026.
• Box 1g carries basis, Box 9 flags noncovered. If Box 1g is blank, you determine basis from your own books and records.
• A voluntary figure is not a certified one. Brokers may report basis on noncovered assets and avoid certain penalties by checking Box 9, so verify those numbers against your records.
• FIFO is the default. Without an adequate identification made to your custodial broker by the time of the sale, the earliest acquired units are treated as sold first.

What Form 1099-DA Reports, and What It Leaves Out

Form 1099-DA is the information return brokers file for sales and exchanges of digital assets. Brokers began reporting gross proceeds for transactions on or after January 1, 2025, which is why the first statements landed at the start of 2026.

Gross proceeds means what you received. On its own it says nothing about whether you made money.

That asymmetry is deliberate. The final regulations phased the obligation in, proceeds first and basis second, giving brokers time to build systems that can follow a purchase price across an asset class where holdings move between platforms constantly. The second phase is the one arriving now.

A proceeds figure in the six figures does not mean you owe tax on six figures. Your gain is proceeds minus basis, and an active trader who bought and sold the same position repeatedly can show enormous proceeds against a modest gain. The IRS receives the same statement you do, though, so a mismatch between that figure and your return is what draws attention. Reconciliation matters more than the size of the number.

What Makes a Digital Asset a Covered Security

Here is the 2026 change stated plainly. For transactions effected on or after January 1, 2026, brokers must report basis information for digital assets that are covered securities. For digital assets that are not covered securities, basis reporting stays voluntary.

The entire practical difficulty of the next few filing seasons sits inside the word covered.

Under the instructions for Form 1099-DA, a covered security is a digital asset acquired after 2025 for cash, stored-value cards, different digital assets, or any property or services whose disposition the broker is required to report, in an account for which the broker provided custodial services. The asset qualifies only if you acquired it in an account where the broker provided custodial services and you held it in that account until the broker effected the disposition.

Three conditions all have to hold:

1. You acquired it after 2025.
2. You acquired it inside a custodial account at that broker.
3. It stayed in that account until the sale.

Break any one and the asset is noncovered.

Why transfers are the condition that trips people up

Condition three is where most crypto falls out, because moving assets is normal behavior. People buy on one platform, move to a hardware wallet for security, and move back to sell where liquidity is better. Every one of those moves severs the custodial chain the definition requires.

A broker receiving an inbound transfer can see what arrived and when. It cannot see what you paid or when you bought it, and the regulations do not ask it to guess.

The practical rule is uncomfortable but simple: basis gets reported for assets that were acquired and sold at the same broker, after 2025, without leaving in between.

Reading Box 1g and Box 9

Two fields carry the whole story.

Box 1g, Cost or other basis. The broker enters the adjusted basis of the digital asset sold, unless the asset is noncovered and the relevant exception applies. If Box 1g is blank, the instructions are direct: you determine your basis from your own books and records.

Box 9, Noncovered security. A check here means the broker classified the asset as noncovered. Brokers may voluntarily report basis information for noncovered digital assets, and when they check Box 9 they are not subject to certain penalties under sections 6721 and 6722 if that voluntarily reported information is incorrect.

That second point is counterintuitive and worth sitting with. A basis figure next to a checked Box 9 is a courtesy, not a certification. The broker has told you it is not standing behind the number. If it conflicts with your records, well documented records are generally the stronger evidence, and you should be able to show why.

Sorting your statements into three piles before anything else makes the work finite:

• Box 9 unchecked, Box 1g populated: a reported basis the broker stands behind.
• Box 9 checked, Box 1g populated: a good faith estimate without that backing.
• Box 9 checked, Box 1g blank: entirely your records.

Which Units Did You Sell?

Basis reporting only works if everyone agrees which units left the account, and the regulations settle that with an identification framework most filers have never had to think about.

Specific identification and the deadline that bites

For digital asset units held in your broker’s custody, the regulations generally let you make an adequate identification by specifying the units to the custodial broker no later than the date and time of the sale, disposition, or transfer, using any identifier the broker designates as sufficiently specific to let it determine the basis and holding period of those units. A standing order or instruction communicated to the broker also works.

The timing is the part people miss. This is not a filing season decision. The instruction has to exist at or before the moment of sale.

Miss that window and the fallback applies. Without an adequate identification, the regulations treat the units as sold in order of time from the earliest date on which units of that same digital asset held in the custody of the broker were acquired, a first in first out result.

FIFO is not inherently bad, but it is rarely what a filer would choose. In a market that has risen over several years, FIFO surfaces your oldest and cheapest units first, which usually means the largest gain.

The relief that buys time through 2026

Treasury and the IRS recognized that some brokers did not have the technology in place by January 1, 2025 to accept specific instructions or standing orders, which could push affected taxpayers into FIFO through no fault of their own. Notice 2026-20 describes a narrower gap for the extended period, referring to brokers that are not yet able to accept adequate identifications other than standing orders.

Notice 2025-7 provided temporary relief allowing eligible taxpayers to use certain alternative methods of making an adequate identification for units held in a broker’s custody. Notice 2026-20 extended that relief for an additional year, and the relief period now runs from January 1, 2025 through December 31, 2026.

Under that relief, where you have made an adequate identification in your own books and records of units sold, disposed of, or transferred during 2026, those are the units treated as sold for federal income tax purposes, regardless of whether the broker’s reported information matches your records.

The condition is that the identification exists in your books and records. Contemporaneous records are the entire mechanism, which rewards the filer who logs decisions during the year and does nothing for the one reconstructing everything in April.

Aligning Your Own Basis Tracking

Running underneath the form change is a shift in how basis is tracked at all, and it matters because broker reporting is per account by construction.

Rev. Proc. 2024-28 provides a safe harbor under section 1012(c)(1) on which taxpayers may rely to allocate unused basis of digital assets to digital assets held within each wallet or account. It exists to move filers off a universal or multi-wallet basis pool and onto a wallet by wallet, account by account approach.

The allocation must be reasonable and must be made as of January 1, 2025, and the revenue procedure permits either a specific unit allocation or a global allocation.

If your internal records still pool basis across every wallet you own while your statements describe single accounts, the two sets of numbers describe different things and reconciling them becomes guesswork. If you have not worked through whether this applies to you, raise it with a qualified tax professional rather than assuming a software default handled it.

Examples: Three Sales, Three Different Statements

Consider three sales at the same custodial broker during 2026.

Sale	Acquisition	Custody history	Classification	What Box 1g likely shows
Sale 1	Bought on the platform, April 2026	Never left the account	Covered	Basis reported by the broker
Sale 2	Bought on the same platform, 2023	Never left the account	Noncovered	Blank, or voluntary with Box 9 checked
Sale 3	Bought in self-custody, March 2026	Transferred in, August 2026	Noncovered	Blank, or voluntary with Box 9 checked

Only the first line produces the clean, fully populated statement people imagine when they hear that brokers now report basis. The second fails the acquisition date test. The third fails the continuous custody test even though the purchase happened well after the cutoff. Same asset, same broker, same year, three different outcomes.

Working Sale 3 end to end

You bought units in a self-custody wallet in March 2026, transferred them to your custodial broker in August, and sold in December.

The statement shows proceeds. Box 9 is checked. Box 1g may be blank.

To report the sale correctly on Form 8949 you need the March acquisition date and the amount you paid, including transaction fees, from your own records. The wallet history and the on-chain transaction give you the date and quantity. Your purchase record gives you the amount.

Then confirm the August transfer was recorded as a transfer, not a disposal. A self transfer misclassified as a sale creates a taxable event that never happened and corrupts the basis of everything downstream. This is a common mechanical error in crypto tax records and it is avoidable with good records.

None of this is exotic. It is evidence you either captured when it happened or have to reconstruct later, and reconstruction gets harder every month as exchange histories get archived and platforms change.

Tax Reporting Requirements

1. Form 1099-DA, Digital Asset Proceeds From Broker Transactions is the information return your broker files and furnishes to you. Gross proceeds reporting applies to transactions on or after January 1, 2025, and basis reporting applies to certain transactions effected on or after January 1, 2026.
2. Form 8949, Sales and Other Dispositions of Capital Assets is where you report each disposition, with acquisition date, sale date, proceeds, and basis. This obligation does not change because a broker reported something.
3. Schedule D (Form 1040) aggregates the short-term and long-term totals from Form 8949 and carries them to your return.
4. Schedule 1 (Form 1040) is the general route for digital asset receipts treated as ordinary income rather than a capital disposition, depending on the facts.
5. The digital asset question on Form 1040 appears near the top of the return and must be answered by every filer, whether or not a Form 1099-DA arrived.

Common Form 1099-DA Cost Basis Mistakes (and How to Avoid Them)

• Treating proceeds as gain. The proceeds box shows what you sold for, not what you made. Subtract basis before you panic.
• Assuming a blank Box 1g means zero basis. It means unreported, not nonexistent. Reporting zero overstates your gain and overpays your tax.
• Trusting a voluntary figure without checking it. When Box 9 is checked, the broker has flagged the asset as noncovered and has no penalty exposure for that number. Compare it against your records.
• Forgetting that transfers break coverage. Moving an asset out and back does not change what you paid, but it does change what the broker must report.
• Letting FIFO happen by accident. If your platform supports specific identification or standing instructions and you never set one, the default applies.
• Recording self transfers as disposals. This manufactures taxable events you never had.
• Reconstructing records in April. The cheapest moment to capture a record is when the transaction happens.

How CRPTM Helps with Form 1099-DA Cost Basis

CRPTM is a crypto portfolio tracker and US crypto tax calculator built for the reconciliation problem this article describes.

1. Import and consolidate. Connect exchanges, wallets, and blockchains using API sync, OAuth, CSV, native exchange file, IRS Form 1099-DA upload, or manual entry depending on what the account supports, and hold the full history in one Transaction Manager.
2. Review classification. Items needing attention are flagged as “Review Txn Type” and “Missing Purchase History,” with the exact missing quantity, so gaps are visible rather than silent.
3. Match self transfers. Transfers between your own wallets are matched so they are not miscounted as disposals.
4. Choose the method deliberately. HIFO, FIFO, and LIFO cost basis methods and Universal or Wallet tracking are available, with FIFO and Wallet as the default.
5. Generate and reconcile. Select a tax year, generate pre-filled Form 8949 and Schedule D output, and click on reconciliation 1099-DA the generated results line by line against the statements uploaded directly to CRPTM.

You can read more about the underlying crypto tax calculator or start with our guide to Form 8949 for crypto.

Related Questions / FAQs

When does Form 1099-DA cost basis reporting actually start?

Brokers must report basis on certain transactions effected on or after January 1, 2026. Statements covering those transactions arrive in the following filing season.

Does my broker have to report basis on crypto I bought in 2024?

No. A digital asset is a covered security only if acquired after 2025 in a custodial account at that broker. Assets acquired earlier are noncovered, and basis reporting for them is voluntary.

Where is cost basis shown on Form 1099-DA?

Box 1g carries cost or other basis. Box 9 indicates that the digital asset is a noncovered security.

Box 1g is blank on my form. What do I do?

Determine your basis from your own books and records. A blank Box 1g does not mean zero basis, and reporting zero would overstate your gain.

What does a checked Box 9 mean?

It means the broker classified the asset as noncovered. If the broker also reported basis voluntarily, it is not subject to certain penalties for failing to report or furnish that information correctly.

Why does transferring crypto between my own wallets affect basis reporting?

A digital asset is covered only if it stayed in the custodial account until the broker effected the disposition. An inbound transfer breaks that chain, so the broker is not required to report basis even when you can document what you paid.

What happens if I do not tell my broker which units I am selling?

The regulations treat the earliest acquired units of that digital asset held in the broker’s custody as sold first, a first in first out result.

Is there relief for taxpayers whose broker cannot accept specific identification?

Notice 2025-7 provided temporary relief permitting certain alternative methods of adequate identification, and Notice 2026-20 extended it. The relief period runs from January 1, 2025 through December 31, 2026.

What is the wallet by wallet basis allocation?

Rev. Proc. 2024-28 provides a safe harbor for allocating unused basis of digital assets to assets held within each wallet or account, moving filers off a universal basis pool. The allocation must be reasonable and made as of January 1, 2025.

Do I still file Form 8949 if my broker reported everything?

Yes. Form 1099-DA is an information return filed by the broker. Reporting each disposition accurately on Form 8949 remains your responsibility, and CRPTM does not e-file or submit returns on your behalf.

Conclusion

The headline is real: Form 1099-DA cost basis reporting arrives with 2026 transactions. The fine print is equally real, and it is where the work lives. Coverage requires an asset acquired after 2025, in a custodial account, held there until sale, and a great deal of ordinary crypto activity fails at least one of those tests.

The filers who find next spring uneventful will be the ones who kept clean per account records through the year, resolved missing purchase history while the source data still existed, and treated broker statements as something to reconcile rather than accept. Where your facts involve transfers, older holdings, or a basis method you are unsure about, a qualified tax professional is worth the call.

For the wider picture, the 2026 US crypto tax overview puts this form in context, and tracking your portfolio through the year is how you avoid the April scramble.

References / Sources

1. IRS, Instructions for Form 1099-DA (2026): https://www.irs.gov/instructions/i1099da
2. IRS, About Form 1099-DA, Digital Asset Proceeds From Broker Transactions: https://www.irs.gov/forms-pubs/about-form-1099-da
3. IRS, Digital assets: https://www.irs.gov/filing/digital-assets
4. IRS, Final regulations and related IRS guidance for reporting by brokers on sales and exchanges of digital assets: https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets
5. IRS, Rev. Proc. 2024-28: https://www.irs.gov/pub/irs-drop/rp-24-28.pdf
6. IRS, Notice 2025-7: https://www.irs.gov/pub/irs-drop/n-25-07.pdf
7. IRS, Notice 2026-20: https://www.irs.gov/pub/irs-drop/n-26-20.pdf
8. Federal Register, Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions: https://www.federalregister.gov/documents/2024/07/09/2024-14004/gross-proceeds-and-basis-reporting-by-brokers-and-determination-of-amount-realized-and-basis-for

Disclaimer

This article is for educational purposes only and does not constitute tax, legal, or financial advice. Federal and state tax rules may change. Consult a qualified tax professional regarding your specific circumstances.