Form 1099-DA shows what you sold for. It may not show what you paid.

Lands on Schedule D — gain rather than proceeds, via Form 8949

If you have never bought, sold, received or swapped a digital asset, this article is not for you — though you will still meet the question on your return, and the answer is No.

Everyone else now has a new form in the mix.

The short answer

Form 1099-DA reports digital asset proceeds from broker transactions — what a sale produced. Whether it also reports what you paid depends on what you sold:

Proceeds minus basis is the gain. When the second number is not on the page, the form is showing you one half of a subtraction — and the half it shows is the big one.

Where the gain is actually worked out

The form reports what you sold for. Nothing on it computes what you made. That happens on two documents the 1099-DA never mentions.

Form 8949, Sales and Other Dispositions of Capital Assets is where each disposal is listed and reconciled. The IRS describes its job exactly: "Use Form 8949 to reconcile amounts that were reported to you and the IRS on Form 1099-B or 1099-S (or substitute statement) with the amounts you report on your return." Digital assets held as capital assets go through the same form — the IRS's digital assets guidance says to "use Form 8949, Sales and Other Dispositions of Capital Assets" when you sold, exchanged or disposed of them.

Schedule D (Form 1040), Capital Gains and Losses is where the totals land: "The subtotals from this form will then be carried over to Schedule D (Form 1040), where gain or loss will be calculated in aggregate."

One qualification that decides which route you are on: held as an investment, "the income would be taxed as a capital gain or loss when you sell or dispose it." Received as payment for goods or services, "the income would be taxed as ordinary income" — and that is business income on Schedule C, not a capital gain at all. How that works for a freelancer paid in crypto, including what happens when the coin later falls, is set out separately.

Why this catches people

A 1099-K reports gross settlement and people mistake it for profit. A 1099-DA invites a version of the same mistake, with a sharper edge: the missing figure is not a fee you can look up on a statement. It is what you paid, possibly years ago, possibly on a platform you no longer use.

The instructions are specific about when the broker has to fill it in:

"For sales a broker has effected for customers after 2025 of digital assets that are covered securities, the broker is required to report basis information."

And when it does not:

"For sales a broker has effected for customers after 2025 of digital assets that are noncovered securities, the broker is not required to report basis information. However, the broker may voluntarily report this information."

A missing basis is not a basis of zero. It is a number you have to produce and support.

The question you answer before any of this

Form 1040 asks it directly:

"At any time during the tax year, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?"

The IRS lists what makes the answer Yes. Receiving digital assets as:

• payment for property or services provided;
• a reward or award;
• mining and similar activities.

And disposing of digital assets:

• for another digital asset;
• for U.S. dollars or other currency;
• in exchange or trade for property, goods or services.

The line that surprises people most

Look at the first disposal: for another digital asset.

Swapping one coin for another is a disposal. No dollars move, nothing leaves the exchange, your bank sees nothing — and you have disposed of property. The dozens of routine swaps that feel like rearranging a portfolio are, each one, a disposal with a proceeds figure and a basis figure attached.

Buying a coffee with crypto is the same thing in miniature: a disposal in exchange for goods.

And "I lost money" is not an exemption

"If you have digital asset transactions, you must report them whether or not they result in a taxable gain or loss."

That sentence removes the most common reason people skip the work. A flat or losing year is still a reporting year. It is also the year where accurate basis is most valuable to you, since an unreported loss is one you cannot use.

What to keep, and when

Everything above turns on records the broker may not have. Three habits cover it.

1. Record every acquisition at the time: date, quantity, what you paid including fees, and where it happened. This is the number that may never appear on any form.
2. Log transfers between wallets and platforms. A transfer is not a disposal, but it is the event that separates an asset from the broker who knows its basis. Untracked transfers are the single biggest cause of missing-basis problems — and since 2025 basis is tracked wallet by wallet, so each wallet needs its own record.
3. Treat every swap as a transaction, not as housekeeping. Date, what went out, what came in, and the value at the time.

Then, when the forms arrive:

• Reconcile each 1099-DA against your own records rather than adopting its figures.
• Check whether basis is present. If it is absent, that is your cue to supply it, not a signal that the sale is untaxed.
• Flag anything you cannot evidence for your tax professional early, while there is still time to go looking for old records.

The form tells the IRS what you sold for. Only your records can say what it cost you.

Track it now. Thank yourself in April.

Common questions

This article is for educational purposes only and does not constitute tax, legal, or financial advice. Consult a qualified tax professional about your situation.

Official sources

• IRS: Digital assets
• IRS: Instructions for Form 1099-DA
• IRS: About Form 1099-DA
• IRS: About Form 8949, Sales and other Dispositions of Capital Assets
• IRS: About Schedule D (Form 1040), Capital Gains and Losses
• IRS Self-Employed Individuals Tax Center