How to Read Form 1099-DA: Complete Line-by-Line Guide 2026

Table of Contents

1. What Is Form 1099-DA?
2. Form 1099-DA Layout and Structure
3. Box-by-Box Breakdown
4. Understanding Your Cost Basis
5. How to Verify Your 1099-DA Is Accurate
6. Common Errors and Red Flags
7. What to Do If Information Is Wrong
8. Real 1099-DA Examples Explained
9. FAQ: Reading Your 1099-DA

---

What Is Form 1099-DA?

Form 1099-DA (Digital Asset Proceeds From Broker Transactions) is the IRS tax form that cryptocurrency exchanges and brokers must send to you and the IRS starting in 2026 (for 2025 tax year).

Think of it as the crypto equivalent of Form 1099-B, which stock brokers send for stock sales.

When You'll Receive It

Delivery Timeline:

• By January 31, 2026 - Brokers must send your form
• Electronic or paper - Available in your exchange account or mailed
• Separate forms - You'll receive one from each exchange where you sold crypto

Who receives it:

• Anyone with $600 or more in gross proceeds from crypto sales during 2025
• "Gross proceeds" = total sale amount, not profit

---

Form 1099-DA Layout and Structure

Form 1099-DA follows a standardized IRS format similar to other 1099 forms. Here's what you'll see:

Top Section: Identification Information

Left Side (Broker Information):

• Broker's name (e.g., "Coinbase, Inc.")
• Broker's address
• Broker's Tax Identification Number (TIN)

Right Side (Your Information):

• Your name
• Your address
• Your Social Security Number (SSN) or Tax ID
• Your account number with the broker

Middle Section: Transaction Details (The Important Part)

This is where the actual crypto sale information appears, broken down into numbered boxes.

Bottom Section: Additional Information

• State tax information (if applicable)
• Special notes or codes
• Broker contact information

---

Box-by-Box Breakdown

Let's go through each box on Form 1099-DA and explain what it means.

Box 1a: Gross Proceeds

What it shows: Total dollar amount you received from selling crypto in 2025

In plain language: This is the sum of all your crypto sales on this exchange during the year.

Example:

Box 1a: $45,250.00

This means you sold crypto worth $45,250 total on this exchange.

Important notes:

• This is gross proceeds (total sale amounts)
• It does NOT subtract what you originally paid (cost basis)
• It does NOT mean you made $45,250 in profit
• Multiple sales are combined into one total

Red flag: If this number seems way too high, you may have:

• Crypto-to-crypto trades counting as sales (yes, these count)
• Internal transfers mistakenly recorded as sales (shouldn't happen)
• Staking rewards incorrectly included (should be on 1099-MISC)

---

Box 1b: Cost Basis (If Available)

What it shows: What you originally paid for the crypto you sold

In plain language: The purchase price of the crypto you sold, which reduces your taxable gain.

Example:

Box 1b: $38,450.00

This means the broker believes you paid $38,450 for the crypto you sold.

CRITICAL ISSUE: This is often wrong or blank.

Why cost basis is often incorrect:

1. Transferred crypto from another wallet/exchange:

   • Broker has no record of your original purchase
   • Box 1b will show $0.00 or be blank
   • You appear to have 100% profit (incorrect)

2. Crypto bought before broker tracked it:

   • Old purchases may not be in broker's system
   • Leads to underreported cost basis

3. Wrong accounting method:

   • Broker may use FIFO (first-in-first-out)
   • You may prefer HIFO (highest-in-first-out) to minimize taxes
   • Can result in significantly different basis

What if Box 1b is blank or $0?

This does NOT mean you have zero cost basis. It means:

• Broker doesn't know your cost basis
• You must provide the correct basis on Form 8949
• You have documentation obligation (transaction records, receipts)

---

Box 1c: Gain or Loss

What it shows: Box 1a (proceeds) minus Box 1b (cost basis) = gain or loss

Example:

Box 1c: $6,800.00

This means: $45,250 (proceeds) - $38,450 (basis) = $6,800 gain

Key point: This is only accurate if Box 1b (cost basis) is correct.

If Box 1b is wrong, Box 1c is meaningless.

What if Box 1c is blank?

• Broker didn't have cost basis information
• You must calculate gain/loss yourself on Form 8949

---

Box 1d: Proceeds Not Reported to IRS

What it shows: Usually blank. May be checked if the transaction is exempt from reporting.

In plain language: This box is rarely used for crypto. If checked, contact the broker for clarification.

---

Box 2: Date of Sale

What it shows: The date you sold, traded, or disposed of the crypto

Example:

Box 2: Various (see attached)

Why "Various"? If you made multiple sales throughout 2025, the form won't list every date. Instead, you'll receive:

• A summary on the main 1099-DA
• A detailed statement attached with all individual transactions

Why this matters: The sale date determines short-term vs long-term capital gains:

• Short-term: Held ≤ 1 year (taxed at ordinary income rates, 10-37%)
• Long-term: Held > 1 year (taxed at lower rates, 0%, 15%, or 20%)

Red flag: If dates seem wrong, your holding period classification may be incorrect, affecting your tax rate.

---

Box 3: Date Acquired

What it shows: The date you originally bought or received the crypto

Example:

Box 3: Various (see attached)

Why this matters: This determines your holding period (short-term vs long-term).

Common issues:

• Blank for transferred crypto: If you transferred crypto into the exchange, the broker doesn't know when you acquired it
• Wrong dates: If broker's records are incomplete

What if Box 3 is blank?

• Provide acquisition dates yourself on Form 8949
• Use your own transaction records (exchange history, wallet records)

---

Box 4: Description of Property

What it shows: Type of cryptocurrency sold

Examples:

Box 4: Bitcoin (BTC)
Box 4: Ethereum (ETH)
Box 4: Various digital assets (see attached)

If multiple types sold: Form may say "Various" and provide details in attached statement.

---

Box 5: Number of Digital Assets Disposed Of

What it shows: Quantity of crypto units sold

Example:

Box 5: 0.5 BTC

Why this matters:

• Helps verify transaction accuracy
• Useful for reconstructing sales if you need to amend
• Can help spot errors (e.g., if you know you only sold 0.25 BTC)

---

Box 6: Federal Income Tax Withheld

What it shows: Any federal tax withheld from your sales

Typical for crypto:

Box 6: $0.00

Why usually $0: Crypto exchanges generally don't withhold federal tax from sales (unlike wages or gambling winnings).

If it's not $0: You can claim this as a tax payment credit on your Form 1040.

---

Box 7: State Information

What it shows: State tax withheld (if any) and your state

Typical for crypto: Usually blank or $0

---

Account Number

What it shows: Your account identifier at the broker

Example:

Account Number: 12345-67890

Why this matters: Helps you identify which exchange the form is from if you use multiple platforms.

---

Understanding Your Cost Basis

This is the most important and most misunderstood part of Form 1099-DA.

The Critical Question: Is the Cost Basis Accurate?

Box 1b (cost basis) is only accurate if:

1. You bought ALL the crypto you sold directly on that exchange
2. You never transferred crypto into the exchange from another wallet
3. The exchange has complete historical records of your purchases
4. The exchange used your preferred accounting method (FIFO, LIFO, HIFO)

Box 1b is likely WRONG if:

1. You transferred crypto from another exchange or wallet before selling
2. You bought crypto before the exchange started tracking cost basis
3. You used DeFi or self-custody wallets before selling on exchange
4. You received crypto as payment, staking rewards, or airdrops

Example: The Transferred Crypto Problem

Scenario:

• 2024: You buy 1 BTC on Kraken for $40,000
• 2024: You transfer 1 BTC from Kraken to Coinbase
• 2025: You sell 1 BTC on Coinbase for $60,000

Coinbase's 1099-DA will show:

• Box 1a (proceeds): $60,000
• Box 1b (cost basis): $0 (Coinbase doesn't know you paid $40,000 on Kraken)
• Box 1c (gain): $60,000 (completely wrong—actual gain is $20,000)

Your responsibility: Report the correct $40,000 cost basis on Form 8949, even though Coinbase reported $0.

---

How to Verify Your 1099-DA Is Accurate

Use this checklist to verify each 1099-DA you receive:

Verification Checklist

1. Check Box 1a (Proceeds):

• Does the total match your memory of sales?
• Download transaction history from exchange
• Add up all sales yourself
• Compare to Box 1a

2. Check Box 1b (Cost Basis):

• Did you transfer any crypto INTO this exchange?
• If yes, Box 1b is definitely wrong
• Calculate your own cost basis using all exchanges/wallets
• Compare to Box 1b

3. Check Box 2 & 3 (Dates):

• Review attached transaction detail
• Verify dates match your records
• Check for correct short-term vs long-term classification

4. Check Box 4 (Description):

• Verify crypto types match what you actually sold
• Look for any cryptocurrencies you didn't sell (error)

5. Cross-Reference Multiple 1099-DAs:

• If you use multiple exchanges, check for duplicate reporting
• Ensure internal transfers aren't counted as sales

6. Compare to Your Own Records:

• Transaction history from all exchanges
• Wallet transaction records
• Blockchain explorer data (Etherscan, etc.)

---

Common Errors and Red Flags

Error #1: $0 Cost Basis for Transferred Crypto

Red flag: Box 1b shows $0 but you know you paid for the crypto elsewhere

Impact: Overstates your gain, increases taxes owed

Fix: Report correct cost basis on Form 8949 with explanation code

---

Error #2: Internal Transfers Reported as Sales

Red flag: Box 1a includes transfers to your own wallet

Impact: Inflates proceeds, creates phantom taxable events

Fix: Identify transfer transactions, exclude from Form 8949, attach explanation

---

Error #3: Wrong Accounting Method

Red flag: Gain seems higher than expected

Possible cause: Broker used FIFO, but HIFO would be better for you

Impact: Higher taxes than necessary

Fix: Use your preferred method on Form 8949 (if allowed by broker)

---

Error #4: Staking/Earn Rewards Included

Red flag: Box 1a includes staking rewards or "Earn" payments

Impact: Double taxation (rewards already taxed as income, now taxed again as sale)

Fix: Staking rewards should be on Form 1099-MISC, not 1099-DA. Correct on Form 8949.

---

Error #5: Duplicate Transactions

Red flag: Multiple 1099-DAs from different brokers for the same transaction

Impact: Double-reported sales, inflated tax liability

Fix: Report transaction once on Form 8949, attach explanation for duplicate

---

What to Do If Information Is Wrong

Step 1: Contact the Broker

First action:

• Contact exchange customer support
• Request a corrected 1099-DA (Form 1099-DA "Corrected")
• Explain the specific error

Timeline:

• Brokers can issue corrected forms through April 15 (tax deadline)
• Don't wait—contact immediately when you spot errors

---

Step 2: Document the Correct Information

Gather proof:

• Transaction history from all exchanges
• Wallet transaction records
• Blockchain explorer screenshots
• Purchase receipts/confirmations
• Transfer records

---

Step 3: Report Correctly on Form 8949

Even if the 1099-DA is wrong, you must report it, then correct it.

How to correct on Form 8949:

1. Column (a) - Description: Enter as shown on 1099-DA
2. Column (b) - Date acquired: Enter correct date (even if different from 1099-DA)
3. Column (c) - Date sold: Enter as shown on 1099-DA
4. Column (d) - Proceeds: Enter as shown on 1099-DA (Box 1a)
5. Column (e) - Cost basis: Enter correct cost basis (not what's on 1099-DA)
6. Column (f) - Adjustment code: Enter "B" (basis reported incorrectly)
7. Column (g) - Adjustment amount: Enter difference between correct and reported basis

Example:

Description	Date Acquired	Date Sold	Proceeds	Cost Basis	Code	Adjustment
1 BTC	03/15/2024	11/20/2025	$60,000	$40,000	B	$40,000

Explanation to attach: "Cost basis adjustment: 1099-DA reported $0 basis for crypto transferred from Kraken. Actual cost basis: $40,000 (purchase on Kraken, 3/15/2024). Supporting documentation available upon request."

---

Step 4: Keep Detailed Records

IRS audit preparation:

• Store all supporting documents for 7 years
• Transaction hashes
• Exchange statements
• Transfer confirmations
• Corrected 1099-DA (if received)
• Form 8949 with explanations

---

Real 1099-DA Examples Explained

Example 1: Simple Coinbase Sale

Scenario: You bought and sold BTC entirely on Coinbase

1099-DA Shows:

• Box 1a (Proceeds): $12,500
• Box 1b (Cost Basis): $10,000
• Box 1c (Gain): $2,500
• Box 2 (Date Sold): 08/15/2025
• Box 3 (Date Acquired): 02/10/2025

Analysis: ✅ Accurate - Bought and sold on same exchange, no transfers ✅ Short-term gain - Held less than 1 year ✅ Tax rate: Ordinary income rates (10-37%)

Action: Report as shown on Form 8949, no corrections needed

---

Example 2: Transferred Crypto (Common Problem)

Scenario: Bought on Kraken, transferred to Coinbase, sold on Coinbase

1099-DA Shows:

• Box 1a (Proceeds): $50,000
• Box 1b (Cost Basis): $0
• Box 1c (Gain): $50,000
• Box 2 (Date Sold): 06/20/2025
• Box 3 (Date Acquired): Blank

Analysis: ❌ INCORRECT - Cost basis is $0 (should be $42,000 from Kraken purchase) ❌ Gain overstated by $42,000 ❌ Tax overpayment: ~$10,000 if not corrected

Action:

1. Report $50,000 proceeds (as shown)
2. Report $42,000 cost basis (correct)
3. Use adjustment code "B"
4. Attach explanation with Kraken purchase documentation

---

Example 3: Multiple Exchanges

Scenario: You use Coinbase, Kraken, and Gemini

You receive 3 separate 1099-DAs:

Coinbase 1099-DA:

• Proceeds: $25,000
• Cost basis: $18,000
• Gain: $7,000

Kraken 1099-DA:

• Proceeds: $15,000
• Cost basis: $12,500
• Gain: $2,500

Gemini 1099-DA:

• Proceeds: $8,500
• Cost basis: $6,000
• Gain: $2,500

Action:

• Report all three on Form 8949
• Total proceeds: $48,500
• Total cost basis: $36,500
• Total gain: $12,000
• Pay tax on $12,000 total gain

---

FAQ: Reading Your 1099-DA

1. What if I don't receive a 1099-DA?

If your gross proceeds were under $600 on an exchange, you won't receive a form from that broker. You still must report all crypto sales on your tax return.

2. Can I file my taxes before receiving my 1099-DA?

Not recommended. Wait until you receive all 1099-DAs (by Jan 31). The IRS will match your return against these forms.

3. What if my 1099-DA arrives after I file?

If you already filed and receive a 1099-DA, you may need to file an amended return (Form 1040-X) to include it.

4. Do I attach the 1099-DA to my tax return?

No. Keep it for your records. You report the information on Form 8949 and Schedule D.

5. What if I lost money but my 1099-DA shows a gain?

This happens when cost basis is wrong (often $0). Report the correct cost basis on Form 8949 with adjustments to show your actual loss.

6. Can I ignore a 1099-DA if it's wrong?

Never ignore it. The IRS receives a copy. Report it on Form 8949, then correct the errors with adjustment codes and explanations.

7. What if proceeds include non-taxable transfers?

Identify internal transfers, mark them as non-taxable on Form 8949, and attach an explanation. Contact the broker to request a corrected form.

8. How long should I keep my 1099-DA?

At least 7 years along with all supporting documentation (transaction history, cost basis records).

9. What if I have conflicting 1099-DAs from different brokers?

This may indicate duplicate reporting or errors. Reconcile all forms, report each transaction once on Form 8949, and attach explanations for any duplicates.

10. Where can I find the detailed transaction breakdown?

Most 1099-DAs include a supplemental statement attached or available online in your account showing individual transactions.

---

Summary: 1099-DA Reading Checklist

When your 1099-DA arrives:

• Verify your personal information (name, SSN, address)
• Check Box 1a (proceeds) against your transaction history
• Verify Box 1b (cost basis) - is it accurate?
• Review dates (Box 2 & 3) for holding period classification
• Check for transferred crypto (common source of errors)
• Cross-reference with other 1099-DAs if you use multiple exchanges
• Calculate your actual cost basis using all records
• Report correctly on Form 8949 with adjustments if needed
• Keep all documentation for 7 years

Key Takeaway: Your 1099-DA is a starting point, not the final word. Verify everything and correct errors on Form 8949 to avoid overpaying taxes.

---

About the Author

CryptoForms Research Team
This guide is based on IRS Form 1099-DA specifications, consultations with licensed CPAs specializing in crypto taxation, and analysis of broker reporting systems. Led by Nicholas Delgado (CEO/CTO) and Alex Cruzet (CAO, MAcc, MBA), with blockchain tax experience from EisnerAmper.

Last Reviewed: November 26, 2025
Next Review: February 2026 (after initial 1099-DA season)

---

Related Articles

Essential 1099-DA Resources:

• Form 1099-DA Complete Guide - Comprehensive overview
• 1099-DA Requirements for 2025 - Who gets forms, deadlines
• 1099-DA vs 1099-B: What's the Difference? - Compare to stock forms
• Missing 1099-DA? What to Do - Troubleshooting guide

Filing & Reporting:

• How to Report Crypto on Your Taxes - Step-by-step filing
• Complete Crypto Tax Guide 2026 - Tax fundamentals
• Best Crypto Tax Software 2026 - Compare tools

Exchange-Specific Guides:

• Coinbase Tax Guide - Coinbase 1099-DA details
• Kraken Tax Guide - Kraken reporting
• Gemini Tax Guide - Gemini compliance

---

---

Disclaimer: This article provides general information about Form 1099-DA and should not be considered professional tax advice. Tax rules are complex and individual circumstances vary. Consult a qualified tax professional or CPA specializing in cryptocurrency for advice specific to your situation. CryptoForms is not a CPA firm and does not provide tax, legal, or accounting advice.

Publication Information:
Published: November 26, 2025
Updated: November 26, 2025
Word Count: 2,067 words
Read Time: 8 minutes

---

END OF ARTICLE