Form 1099-DA: What the Broker Reports and What You Still Have to Prove

The short answer

Form 1099-DA is titled “Digital Asset Proceeds From Broker Transactions”, and the title is a fair description of its scope. It reports what a broker did for you, not what you owe.

The 2026 instructions describe three reporting obligations, and the difference between them is the whole subject:

• Gross proceeds for all digital assets, for sales effected after 2025.
• Basis for digital assets that are covered securities.
• Basis voluntarily, if the broker chooses, for digital assets that are noncovered securities.

So the form is complete on the proceeds side and conditional on the basis side. A taxpayer who reads box 1f as “what I sold for” and box 1g as “what I paid” will be right half the time, and the half where they are wrong is the half that decides the tax.

What makes an asset a covered security

This is the definition to read twice, because everything else follows from it. The instructions say a covered security is a digital asset acquired after 2025 for cash, stored-value cards, different digital assets, or any property or services the disposition of which the broker is required to report in an account for which the broker provided custodial services. The next sentence adds two conditions that are easy to skip: the asset is a covered security only if it was acquired in an account for which the broker provided custodial services, and it was held in that account until the broker effects the disposition.

Two tests, therefore:

1. When. Acquired after 2025. An asset bought in 2024 is not a covered security even if sold in 2027.
2. Where. Acquired in the reporting broker’s custodial account and held there until sale. An asset bought on a different venue and transferred in was not acquired in that account.

The instructions’ own example makes the first test concrete. A customer buys the same digital asset in April 2022, April 2026 and August 2026, then sells the whole position in June 2027 in a single transaction. The broker files three forms for that one sale: one for the August 2026 units with short-term gain or loss, one for the April 2026 units with long-term gain or loss, and one for the April 2022 units, which are noncovered. One trade, three forms, two of them with basis and one without.

That is the structural feature that surprises people. The number of forms is a function of the lot history, not of the number of trades.

The lot selection is FIFO unless you act

For assets acquired on different dates at different prices, the instructions tell the broker to report the sale according to the customer’s adequate and timely identification of the digital assets to be sold. If no identification is provided at or prior to the time of the sale, the broker generally must report the earliest units purchased first.

That is FIFO as a default, and it is the same default the cost basis guide describes from the taxpayer’s side. The timing language matters: “at or prior to the time of the sale” is not “when you file”. A lot instruction given the following April does not retroactively change the form.

There is a second sentence in the same section that deserves more attention than it gets. Under current law, brokers may use customer-provided acquisition information solely for lot-selection purposes and not for reporting basis or acquisition dates.

Read that as a boundary on what customer information can accomplish. You can tell a venue which lots to sell. You cannot, by telling it, put your basis into box 1g for a noncovered asset. The basis rule is driven by the covered-security definition, not by the quality of the documentation you supplied.

What the boxes actually carry

Three of these repay a closer look.

Box 1f is net of transaction costs. The instructions require proceeds to be reduced by digital asset transaction costs, including transaction fees, commissions and transfer taxes. That is why the proceeds figure can sit slightly below the number on your trade confirmation. It is not an error and it is not a second fee; it is a convention, and the execution report guide shows where the gross figure and the net figure separate.

Box 9 changes what the rest of the form has to contain. If the broker checks it, boxes 1d, 1g, 1h, 1i and 6 need not be completed and box 2 is not checked. The interesting part is the incentive structure: a broker that voluntarily completes those boxes for a noncovered security is not subject to penalties for getting them wrong, while a broker that reports a noncovered security without checking box 9 is exposed to penalties for those boxes even though the asset was noncovered.

Box 8 is a flag about your own instructions. It records that the broker received customer-provided acquisition information to identify which units were sold, even if that information was not used for the particular lot on this form. If you have ever sent a venue a cost basis schedule, expect to see it.

The dates the form cannot fix

Box 12a and 12b exist because of a specific problem: assets that arrive from somewhere else.

The instructions require the units transferred in and the transfer-in date when the sold assets had been transferred to the broker. And in the lot-selection section, if the broker does not take customer-provided acquisition information into account for determining when the customer purchased the asset, it treats digital assets transferred into the account as acquired as of the date and time of the transfer.

Consider what that does to a position bought in 2021 and moved to a new venue in 2026. The transfer-in date is a 2026 fact. The actual acquisition date is a 2021 fact, and the only party holding it is you. Whether the reported acquisition date is right depends on information you supplied and on whether the broker used it — which is precisely what box 8 is recording.

The practical consequence is that a venue migration is a records event even when it is not a taxable one. Box 12a and 12b are the form’s way of saying so. The statement reconciliation guide covers the same gap from the bookkeeping side, including the internal transfer that looks like a deposit because only one leg was recorded.

What is deliberately not on the form

Two exclusions stand out because they remove exactly the information a taxpayer would most like to receive.

Rewards and staking payments. The instructions devote a heading to this and use six words for the rule: “Do not report rewards and staking payments on Form 1099-DA.” There is no box for them. The income is taxable when received, the basis in the received units is a fact you have to record at the time, and the form is silent on both. Anyone who has staked for a year has a basis-tracking problem that no information return will solve.

Anything without a broker behind it. A sale from a self-custody wallet has no broker to report it. So does a protocol interaction, and so does a transfer between your own accounts, which is not a sale at all. The form covers the accounts where a custodial intermediary stood between you and the market, and that is a shrinking share of some portfolios rather than all of them.

There are also de minimis thresholds, which produce the absence of a form rather than a blank box. A processor of digital asset payments need not report payment sales of $600 or less for the year and, once the total exceeds $600, must report all of the customer’s sales. A broker using the optional method for qualifying stablecoins need not report designated sales whose aggregate gross proceeds, after allocable transaction costs, do not exceed $10,000 for the year. For specified NFTs the same threshold is $600. These are reporting thresholds, and the instructions are careful to call them de minimis rules for reporting rather than exemptions from anything.

What a taxpayer still has to prove

The form gives you a printed record of proceeds and, sometimes, of basis. Four things it does not give you:

1. The acquisition side of a noncovered lot. Date and amount paid, with enough detail to survive a request for documentation.
2. The transfer history. When units moved between accounts, in what quantity, and which lot they were. The sub-account and API key guide explains why a sub-account is an account rather than a label, and the same logic applies to a wallet that is “yours” for one purpose and a separate holding for another.
3. The income events. Rewards, staking, interest, airdrops, and the basis each created.
4. The fee treatment. A fee paid in a third asset — BNB being the usual example — is a disposal of that asset as well as a cost of the trade, and it appears in the trade record as a commission in a currency you did not trade.

The instructions map the form onto the taxpayer’s own schedules through a one-letter code: G for a short-term transaction with basis reported, H for short-term without basis, J for long-term with basis, K for long-term without basis, and Y when the broker cannot tell the holding period. That code is the form telling you which boxes it filled and which it left.

One more limit is worth knowing before relying on box 6. The average basis method is available only for digital assets that are also tokenized securities. For an ordinary token, the basis question is lot by lot, which is why the default in the lot-selection rule has consequences.

A procedure for the first season on the new form

1. Read box 9 first. Everything else on the form depends on whether it is checked.
2. Count the forms against the trades. One sale can produce several forms where the lots were acquired at different times. Three forms for one trade is correct behaviour, not a duplication.
3. Match box 1f to the confirmation, allowing for transaction costs, and match the 8949 code to what was actually filled.
4. Fill the gaps from your own records, not from the venue’s average entry price, which is a derived figure rather than a stored transaction.
5. Record the transfer-in dates as you create them, because box 12b will not reconstruct them later.
6. Keep the rewards ledger separate. It is the one category with no third-party report behind it.

Risk note. The rules described here were read from the IRS Instructions for Form 1099-DA (2026) on 2026-10-29 and are reproduced as that document states them, including the covered-security definition, the lot-selection default, the box requirements, the de minimis thresholds and the exclusion of rewards and staking payments. Form instructions change, and they are the operative source rather than this summary. This article describes a US reporting obligation for general information; it is not tax advice, and the treatment of any particular transaction depends on your jurisdiction and your facts.