1099-DA is here. Most CPAs aren’t ready. We are.
Form 1099-DA is the most significant IRS reporting expansion for digital assets since the virtual currency question debuted on Form 1040. Starting with 2025 transactions, every U.S.-regulated broker must report gross proceeds. Starting 2026, they must report basis. Most of those reports will be wrong. We fix them — transaction by transaction.
Schedule a 30-minute intake →The phased reporting timeline — and what it means for your return.
Gross Proceeds Reporting
Beginning January 1, 2025, brokers subject to IRC §6045 must report gross proceeds from covered digital asset dispositions on Form 1099-DA. This is the same requirement that applies to stock sales — every sale, every swap, every disposition that moves through a covered broker is reported. Basis is not required in Phase 1 — only gross proceeds and the date of disposition.
Basis Reporting Begins
Starting with the 2026 tax year, brokers must also report adjusted basis for covered transactions. This is where the $0-basis trap becomes a systemic problem: assets that were acquired before the covered period, or that moved between wallets and exchanges, will frequently show $0 basis on the 1099-DA because the broker has no acquisition data. Filing without correcting these entries is the fastest way to overpay.
Broker Data Is Often Wrong
Exchanges only know what happened on their platform. Every transfer from a self-custody wallet, every cross-exchange movement, and every pre-2025 acquisition is invisible to the broker. The IRS will receive 1099-DAs with $0 basis on thousands of transactions that have real, documented cost basis. Without a Code B adjustment on Form 8949 and supporting documentation, taxpayers will pay tax on gains that were never gains.
Six ways 1099-DA will be wrong for most clients.
$0 Cost Basis
The broker has no record of your acquisition because it happened on a different exchange, in a self-custody wallet, or before the covered period. They report $0 basis. You pay tax on the full proceeds. We correct this with chain-sourced acquisition documentation.
Wrong Acquisition Date
Transfers between wallets can make the broker’s acquisition date wrong by months or years, shifting a long-term gain into short-term territory. The difference can be 15+ percentage points in federal tax rate.
Duplicate Reporting
Transfers between your own wallets and exchanges are not dispositions — but they can appear as dispositions on a 1099-DA. Without reconciliation, these phantom gains inflate your reported income and your tax.
Staking & Reward Income Double-Counted
If staking rewards were already reported as ordinary income at receipt (the IRS default under Rev. Rul. 2023-14), the 1099-DA should show the FMV-at-receipt as cost basis. Many brokers will not reflect this correctly, creating phantom gains on later dispositions.
Wrong Identification Method
After Rev. Proc. 2024-28, basis tracking must be done wallet-by-wallet. Brokers may apply a universal FIFO default that is inconsistent with your elected method, producing gains or losses that differ from what your wallet-level records show.
Wrapped & Bridged Token Errors
Wrapping BTC into wBTC, bridging USDC across chains, or moving assets through a DEX aggregator may appear as taxable dispositions on a 1099-DA even when they are not. We document the non-taxable character and file the appropriate adjustment.
Cross-reference. Reconcile. File correctly.
- Cross-reference broker 1099-DA against chain data. Every line on every broker form is matched against your on-chain and exchange history. Discrepancies are flagged and documented.
- Reconcile cost basis. We rebuild your actual acquisition cost from source data — chain transactions, original exchange records, DeFi protocol receipts. Every lot is documented.
- File Form 8949 with the right adjustments. Code B for basis adjustments. Code O for other adjustments. Every corrected line includes the substantiation the IRS would need at exam.
- Prepare the documentation package. Source CSVs, on-chain transaction hashes, methodology memo, and a reconciliation summary — all saved and organized for audit.
- Coordinate the Rev. Proc. 2024-28 election. If you have not already made the wallet-by-wallet election, we handle it as part of the 1099-DA engagement so your basis tracking and your broker reporting align going forward.
Three steps from intake to filed return.
Intake Call
We spend 30 minutes understanding your wallet setup, exchange history, and the 1099-DAs you’ve received or expect. We identify the discrepancy risk and scope the engagement.
Reconciliation
You send us your 1099-DAs, exchange CSVs, and wallet addresses. We rebuild your transaction history, identify every discrepancy, and prepare the corrected Form 8949 with supporting documentation.
Filed & Documented
Your return is filed with corrected Form 8949, Code B adjustments where needed, and a full documentation package. You have everything needed to respond to any IRS inquiry without picking up the phone.
Have a 1099-DA with numbers that don’t look right?
They probably aren’t right. Schedule a 30-minute intake and we’ll tell you exactly what needs to be corrected.
Schedule a 30-minute intake →