Starting January 1, 2026, brokers must report cost basis on Form 1099-DA for certain crypto sales. The rule sounds broad, yet it reaches a narrow group of coins. Your broker must report basis only for coins bought on its platform after 2025. Those coins must also stay there until the sale.
Every other sale still depends on your own records. That includes coins bought in earlier years and coins moved in from another wallet. For those sales, the Internal Revenue Service (IRS) instructions leave basis reporting to the broker’s discretion. The calculation, however, remains your responsibility.
This guide is for U.S. investors who hold older coins or move crypto between platforms. It shows which sales carry basis, how brokers pick units, and how to report each one.
Key Takeaways
- Brokers must report basis only for covered digital assets sold on or after January 1, 2026.
- Coins bought before 2026 or transferred in from elsewhere are noncovered, so basis reporting is optional.
- Without your instructions, brokers treat your earliest units as sold first.
- You calculate basis yourself for each noncovered sale on Form 8949.
- Notice 2026-20 extends the relief for recording lot choices in your own books through 2026
What Changed on Form 1099-DA in 2026?
Brokers now must report cost basis for covered digital assets sold on or after January 1, 2026. For noncovered assets, basis reporting stays voluntary. Gross proceeds still appear for each reportable sale, just as they did on 2025 forms.
The word “covered” carries the whole rule. Each sale either passes the covered test or fails it. That one test decides what your form shows. New to the form itself? Our Form 1099-DA guide explains the basics first.
Which Digital Assets Count as Covered Under the 2026 Rule?
A digital asset is covered only when it meets three conditions at once. Miss any one of them, and the broker no longer has to report its basis.
What Makes a Digital Asset Covered?
The IRS sets out three tests, and all three must apply:
- Acquired After 2025: You bought the asset with cash, a stored-value card, or another digital asset.
- Bought in a Custodial Account: The broker held the asset for you when you acquired it.
- Held Until the Sale: The asset stayed in that same account until the broker sold it.
Which Digital Assets Remain Noncovered?
Any asset that fails a test is noncovered. The most common examples are:
- Acquired Before 2026: You bought the coins before January 1, 2026, even on the same exchange.
- Transferred In: The coins arrived from another wallet or broker.
- Bought Without Custody: The broker did not hold the coins for you when you acquired them.
Will Your 2026 Form 1099-DA Show Basis?
Only the first scenario below produces a mandatory basis figure. The other three leave the number to you.
Scenario | Covered? | Basis Reported? |
Bought bitcoin on Exchange A in March 2026, sold there in July 2026 | Yes | Required |
Bought bitcoin on Exchange A in 2024, sold there in 2026 | No | Optional |
Bought bitcoin on Exchange A in 2026, moved it to Exchange B, sold it there | No | Optional |
Bought bitcoin through a self-custody wallet, sent it to an exchange, sold it | No | Optional |
The third row shows how little it takes to lose covered status. A single transfer between two custodial exchanges is enough, even when both platforms report to the IRS. In that case, the basis figure falls to you. Our guide on calculating crypto cost basis shows how to work it out.
How Can You Tell Whether Your Broker Reported Basis to the IRS?
Box 2 of form 1099-DA answers that question. A check in Box 2 means your broker sent the basis figure to the IRS. A check in Box 9 means the sale involved a noncovered asset.
Which Boxes Show Basis Details?
Four spots on the form tell the full basis story:
- Box 1g: The cost or other basis of the units sold.
- Box 2: Checked when the broker reported that basis to the IRS.
- Box 9: Checked when the asset is a noncovered security.
- Boxes 12a and 12b: The number of units transferred in and the transfer date.
A noncovered sale can still carry a figure in Box 1g. Brokers may report it voluntarily, and Box 9 stays checked when they do. Treat that number as a starting point and confirm it against your purchase records.
How Does Your Broker Decide Which Crypto Units You Sold?
Your broker sells the units you identify at or before the time of sale. Without that instruction, it treats your earliest units as sold first. This choice matters because each unit carries its own basis and holding period.
The broker applies the first in, first out (FIFO) rule. Your oldest units leave the account first, and their basis drives the gain. For this ordering, units transferred in without purchase data count as acquired on the transfer date.
How Do You Choose Which Units to Sell?
Give your broker a specific identification or a standing order before the trade executes. A specific identification names the units for one sale. A standing order, such as selling your newest units first, sets a default for later sales.
How Long Does the Notice 2025-7 Relief Last?
The relief now runs through December 31, 2026. Notice 2025-7 first let investors record lot choices in their own books for 2025. Some brokers could not yet accept those instructions. Hence, Notice 2026-20 extends that relief for one more year until December 31, 2026, while brokers finish building their systems. From 2027, your instructions must reach the broker itself.
Why Does Wallet-by-Wallet Tracking Matter?
Basis now follows each wallet or account separately. Since January 1, 2025, the IRS has required this account-by-account approach for digital assets. Revenue Procedure (Rev. Proc.) 2024-28 let investors assign unused basis to each wallet as of that date. Units in one account no longer borrow basis from another.
How Do You Report 2026 Crypto Sales on Form 8949?
Pick the Form 8949 box that matches your Form 1099-DA. The Form 8949 instructions give digital assets their own boxes, split by holding period and basis status.
Which Form 8949 Box Fits Your Sale?
Three facts decide the box. The first is your holding period. The second is whether you received Form 1099-DA. The third is whether the basis was reported to the IRS. Without a Form 1099-DA, use Box I or L, whatever the basis status.
Box | Holding Period | When to Use It |
G | Short-term | Form 1099-DA shows basis reported to the IRS |
H | Short-term | Form 1099-DA shows no basis, or basis not reported to the IRS |
I | Short-term | You received no Form 1099-DA |
J | Long-term | Form 1099-DA shows basis reported to the IRS |
K | Long-term | Form 1099-DA shows no basis, or basis not reported to the IRS |
L | Long-term | You received no Form 1099-DA |
For covered sales, start with the broker’s figure and check it against your records. For noncovered sales, you supply the basis. A blank Box 6 means the broker did not know the holding period. Your records decide it.
Our walkthrough on reporting crypto on Form 8949 and Schedule D covers each column in detail.
What Should You Do If the Basis on Your Form 1099-DA Is Wrong?
Ask the broker that issued the form for a corrected copy. The IRS states that it cannot correct a Form 1099-DA for you. Only the filer named at the top left of the form can fix it.
What Steps Fix an Incorrect Form?
Work through these steps as soon as you spot the error:
- Contact the Filer: Use the filer details printed on the form to request a correction.
- Keep Your Paperwork: Save the original form, the corrected version, and all correspondence.
- File on Time: Do not delay your return while you wait for the broker.
A mismatch between your return and the broker’s figures can prompt an IRS notice. Our guide to Letters 6173, 6174, and CP2000 explains what each notice means and how to respond.
How KoinX Helps You Fill the Cost Basis Gaps on Form 1099-DA?
Your own purchase history fills the gaps that Form 1099-DA leaves. Noncovered sales need records from older accounts, other exchanges, and self-custody wallets. KoinX pulls those records together and calculates the basis for each disposal.
Transaction Tracking Across 800+ Integrations
Connect 800+ exchanges, wallets, and blockchains to import your full transaction history. The import reaches back before 2026 and includes trades, transfers, and rewards. That matters because noncovered coins carry their original cost from another platform. With every account in one place, you can recover the basis your broker skipped.
Form 8949 Report for Noncovered Sales
The Form 8949 Report lists each disposal with dates, proceeds, cost basis, and gain or loss. It fills in basis for the noncovered sales your Form 1099-DA leaves blank. Short-term and long-term sales appear separately, so each line maps to the right Form 8949 box.
Complete Tax Report for Checking Broker Figures
The Complete Tax Report shows your full-year gains, losses, and income in one view. Compare its totals with each Form 1099-DA before you file. A gap between the two flags was a problem early. It may point to a wrong broker figure or a missing purchase record.
Note: 1099-DA Reconciliation is an upcoming feature and is not yet available.
Your Form 1099-DA now shows basis only for coins bought and kept on one platform after 2025. Sign up on KoinX to work out basis for your older and transferred coins. Then file your 2026 return with complete figures.
Conclusion
The 2026 rule puts basis on the form for a narrow slice of sales. Each covered sale this year is also short-term. No covered coin has been held over a year. Long-held coins and transferred assets still arrive without a required basis.
So the work starts before the form arrives. Gather acquisition records for your noncovered holdings, then set a standing order with each broker you use. Calculate the missing basis on KoinX and file with figures you can support.
Frequently Asked Questions
When Will Brokers Send the 2026 Form 1099-DA?
Brokers must furnish 2026 forms by February 16, 2027. Publication 1099 sets the deadline at February 15 of the following year. In 2027, that date falls on Presidents’ Day, so the deadline moves to the next business day. If yours never arrives, see what to do without a Form 1099-DA.
Will My Broker Withhold Tax From My 2026 Crypto Sales?
Not under the backup withholding rules. The IRS grants relief from backup withholding for all digital asset transactions in 2025 and 2026. Narrower relief applies in 2027, mainly for customers whose name and taxpayer identification number match IRS records. Keep your details current with each broker to avoid withholding later.
Does the Gross Proceeds Figure Already Account for Fees?
Yes. Brokers reduce the gross proceeds in Box 1f by digital asset transaction costs. Do not subtract those same fees again on Form 8949, or you will understate your gain. Paying a fee in crypto is different. The units spent on that fee count as a separate disposal.
Can I Give My Broker My Purchase History So It Reports My Basis?
No. Brokers may use customer-provided purchase information only to decide which units were sold. The IRS broker reporting FAQs bar them from using it to report basis. When a broker relies on your data for lot selection, it checks Box 8 on the form.
