The IRS's New Crypto Form Knows You Sold—But Don't Ask It About Your Cost Basis

The first Form 1099-DA season is arriving for US crypto investors with a basic problem: many people are getting the new IRS form before they understand what it actually tells them. A Coinbase and CoinTracker survey of 3,000 US crypto users found that 61% were unaware of the new 2025 reporting rules, even though 74% said they knew crypto activity can be taxable and 56% rated their own knowledge of crypto tax rules as good or excellent. Apparently, confidence and comprehension are doing同人不同命 in this market.

That gap comes as the IRS begins receiving more standardized data on digital-asset sales handled by brokers. Treasury and the IRS require brokers to report gross proceeds on Form 1099-DA for digital-asset sales effected in 2025, with basis reporting on covered securities starting in 2026. The IRS has also told taxpayers that most 2025 statements will not include basis, meaning the form can show that a sale happened without doing the work needed to determine the actual gain or loss. It's a bit like your ex letting you know they moved on—technically informative, absolutely not helpful.

For many investors, that turns a new information return into a false sense of completeness. The IRS says Form 1099-DA is used by brokers to report proceeds from, and in some cases basis for, digital-asset dispositions to both the taxpayer and the government. It also says taxpayers must report all income, gains, and losses from digital-asset transactions, whether or not they receive the form, and must calculate the basis before filing. The form is basically the IRS saying "we see you sold something" while muttering under its breath "good luck figuring out the rest."

A new form, but not a finished tax answer. The transition-year structure is what makes the first filing season unusually easy to misread. A taxpayer who bought Bitcoin on one exchange, moved it to self-custody, later transferred part of it to another platform, and sold there may receive a Form 1099-DA showing the disposal proceeds. However, if the asset was transferred in from another broker or wallet, the form may not carry the basis information needed to calculate the real taxable result. This is the crypto equivalent of your bank showing you the withdrawal without mentioning you also had a deposit that morning.

Tax practitioners writing in The Tax Adviser said taxpayers may receive Forms 1099-DA without basis for assets transferred in from another broker or self-custody wallet, for sales on some noncustodial platforms, and for assets bought before 2026 that are not treated as covered securities. That is why tax specialists are warning taxpayers not to treat the document like a completed brokerage statement. Think of it as a receipt that proves you bought dinner, not a credit card statement showing what you actually ate.

Jonathan Cutler, a Deloitte senior manager, reportedly said the 2025 form is mainly a signal that the taxpayer transacted in crypto, while adding that taxpayers "really need their own records to be tight." The IRS has made the same point in plainer terms. Its guidance says taxpayers should use Form 1099-DA together with their other records and that they must calculate basis before filing. It also notes that taxpayers transacting through foreign brokers may not receive a Form 1099-DA from those brokers even when the transactions remain taxable in the United States. Foreign exchanges out here living rent-free in the IRS's head while your domestic brokerage sends forms that are technically accurate and practically useless.

Where investors are getting tripped up. Meanwhile, the Coinbase and CoinTracker survey data suggests the confusion is not limited to basis, as it found that only 49% of respondents correctly said a tax event is triggered when crypto is sold. Another 41% said tax is triggered when crypto is transferred to a bank, 36% thought tax applies only once profits rise above a threshold, and 22% thought a transfer from another account is itself the trigger. The tax code is basically a Rorschach test at this point.

At the same time, users reported an average of 2.5 platforms or wallets, 83% said they use self-custodial wallets, and 71% said they had transferred assets between wallets or platforms. The new IRS guidance runs against the cash-out logic still common among retail traders. The agency treats digital assets as property for federal income-tax purposes and its Form 1099-DA guidance says taxpayers can receive the form when they dispose of digital assets for dollars, exchange them for another digital asset, use them to pay for goods or services in any amount, or use digital assets to pay broker transaction costs. Basically, if you do anything with crypto that isn't burying it in a field, the IRS wants to know.

The Coinbase's survey found that 76% of respondents knew cost-basis adjustments may be required, but only 35% said they had actually made those adjustments in the past. Shehan Chandrasekera, Head of Tax Strategy at CoinTracker, said: "While crypto brokerages will provide 1099-DA forms this tax year, users are responsible for correctly computing their cost basis, holding period and actual gains or losses. This cost basis issue is uniquely hard to solve." Translation: the form will tell you what you got, but you still need to remember what you paid three DeFi summer ago.

Visibility rises before compliance catches up. The reporting push reflects a wider belief that the old system captured only part of the market. A 2026 paper in Review of Accounting Studies using IRS data found the agency appeared to observe only 32%