If you’ve traded Bitcoin, minted an NFT, or dabbled in stablecoins lately, your mailbox (and your tax return) is about to look a little different. As we move into the 2026 filing season, the IRS is rolling out Form 1099-DA—the first official tax form specifically designed for digital asset transactions.
Here’s everything you need to know to stay compliant and avoid any “red flag” surprises.
1. What is Form 1099-DA?
Think of Form 1099-DA as the “1099-B for the crypto world.” Starting with the 2025 tax year, digital asset brokers (like exchanges and hosted wallets) are required to report your sale proceeds directly to the IRS.
By February 17, 2026, you should receive a copy of this form if you:
- Sold cryptocurrency for cash.
- Swapped one digital asset for another (e.g., trading Bitcoin for Ethereum).
- Used digital assets to pay for goods or services through a broker.
2. The “Cost Basis” Catch
While Form 1099-DA will show your gross proceeds (the total value of the sale), there is a significant hurdle for the 2025 tax year: most brokers are not yet required to report your cost basis.
Why this matters: Your tax is calculated on your profit, not the total sale amount. If the IRS sees a $10,000 sale on a 1099-DA but has no record of what you originally paid for it, they may assume your cost was $0—potentially leading to a much higher tax bill than you actually owe.
The Fix: You must maintain your own records. Use transaction histories or crypto tax software to calculate your own basis so you can accurately report gains or losses on Form 8949.
3. The Mandatory “Yes/No” Question
Don’t ignore the fine print at the top of your Form 1040. Every taxpayer—even those who have never touched a digital asset—must answer the mandatory digital asset question.
- When to check “YES”: If you received crypto as payment, sold it, gifted it, or traded it for other property.
- When to check “NO”: If you simply held assets in your own wallet, moved them between wallets you own, or bought crypto with “real” currency (USD) and did nothing else with it.
4. What Counts as a “Digital Asset”?
The IRS definition is broad. It includes:
- Cryptocurrencies (Bitcoin, Ethereum, etc.)
- Stablecoins (USDC, USDT, etc.)
- Non-Fungible Tokens (NFTs)
Checklist: Preparing for Your 2025 Filing
- [ ] Gather all 1099-DAs: You will receive one from every broker you used for sales or exchanges.
- [ ] Check for accuracy: Ensure the proceeds listed match your actual trade history.
- [ ] Reconcile your basis: Since 2025 is a transition year, you are the primary keeper of your cost data.
- [ ] Report everything: Even if a broker didn’t send you a form (such as from a decentralized exchange), you are still legally required to report the income.
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