Anyone who took the automatic extension on a 2025 federal return has until Thursday, October 15, to file it. For people who sold crypto through an exchange last year, that return is the first one built around Form 1099-DA, the broker statement the IRS required for digital-asset sales beginning with transactions on or after January 1, 2025. Any tax owed was due in April; the extension only moved the filing date.
The new form came with a gap built in. For that first year, brokers had to report what a customer’s coins sold for, but not what the customer paid for them, and the purchase cost is the number that turns proceeds into a gain or a loss. Two people who sold the same coins on the same day for the same price can owe very different tax, and the 2025 form didn’t have to show why.
That left the cost side of each sale to the holder’s own records, and most of the 2025 cycle follows from it: new boxes on Form 8949, separate handling for coins moved between wallets, and a second form, the 1099-MISC, that picks up rewards the 1099-DA leaves out. Sales made in 2026 start to close the gap, though only for some coins.
Brokers Reported 2025 Proceeds and Could Skip the Basis
The rule sits in the instructions for Form 1099-DA dated May 30, 2025. Brokers were “not required to report basis information with respect to sales effected in 2025,” though they could fill in those boxes voluntarily, and the instructions said a broker that did so wouldn’t face penalties under sections 6721 or 6722 for getting that voluntary information wrong.
So the first forms varied by broker. Coinbase’s tax-forms explainer told customers it would report gross proceeds only for tax year 2025. A holder with accounts at two exchanges could open one statement showing basis and another showing none, for sales of the same asset in the same month.
The rulebook kept moving after the year ended, too. On January 7, 2026, the IRS posted corrections to the 2025 instructions, covering de minimis rules for reporting certain sales and the optional reporting methods. For a first-year form, that meant the reporting text changed after the year it governed had already closed.
Form 8949 Gave Digital Assets Six Boxes of Their Own
The return had to change to receive those statements. The 2025 instructions for Form 8949 add boxes G, H and I for short-term digital-asset sales and boxes J, K and L for long-term ones. They’re explicit that filers shouldn’t use box C or box F, the boxes long used for sales no broker form reported, for digital assets at all.
Which box a sale lands in depends on what arrived in the mail or the inbox. A 1099-DA that showed no basis sends the sale to box H or box K, and no broker statement at all sends it to box I or box L. Where a statement did arrive, the proceeds go into column (d) as the broker reported them, and the holder’s cost goes into column (e) either way.
That cost is broader than a purchase price. The instructions define a digital asset’s basis as “the cost to acquire the digital asset, including transaction fees, commissions, transfer taxes, and other acquisition costs.” Where a broker left box 6 blank and entered code X, meaning it couldn’t tell whether a gain was short-term or long-term, the instructions tell the filer to “use your own records” and decide.
The return’s front page asks about the same activity. Near the top of each federal return sits a question, answered yes or no, about the filer’s digital assets during the tax year: did they get any as payment, a reward or an award, or sell, swap or otherwise dispose of any? A sale that shows up on a 1099-DA makes the answer yes, whatever the basis turns out to be.
Coins Moved In From Elsewhere Arrive With a Date and No Price
Transfers are where broker records run out. When coins come into a custodial account from another wallet or exchange and are later sold, the form’s instructions have the broker report how many of the units sold had been transferred in, in box 12a, and the transfer-in date, in box 12b. Neither box says what those coins cost before they arrived.
That limit outlasts 2025. Basis reporting became mandatory for sales on or after January 1, 2026, but only for covered securities, and a digital asset counts as covered only if it was acquired after 2025 in a custodial account and stayed there until the sale. Coins bought earlier, or bought somewhere else and moved in, stay noncovered, and box 9 flags them that way.
The IRS’s digital-asset page asks taxpayers to keep records of purchase, receipt, sale and disposition. A blockchain explorer shows when coins moved and how many, but not what anyone paid for them, so a log with the date, units, price and fee of every purchase, plus the date and transaction ID of each transfer, is what fills column (e) when the broker’s statement can’t.
Staking Rewards and Prizes Land on Form 1099-MISC
Not every piece of digital value on a 2025 return came from a sale. Staking sits outside the 1099-DA for now: until the Treasury and IRS issue further guidance, Notice 2024-57 says brokers don’t have to file information returns on staking transactions, or on wrapping, liquidity-provider and lending ones. Coinbase’s explainer says customers who earned more than $600 in crypto for tax year 2025 have those transactions reported on Form 1099-MISC, as miscellaneous income.
That form covers a wider set of payments than crypto. Box 3 takes other income along with prizes and awards that weren’t paid for services, and for payments made in 2026 a payer’s filing requirement for that box starts at $2,000, with room left for inflation adjustments in later years.
The same numbers turn up in the tax answer of a LineUps guide to crown coins casino real money redemptions, which puts the 2026 reporting threshold for the sweepstakes prizes it covers at $2,000, up from the old $600, and says those prizes go on Form 1099-MISC. It also tells readers to keep their own record of every redemption, with dates and amounts.
That’s the same discipline the higher floor asks of a coin holder. A holder whose 2026 rewards total less than $2,000 may get no 1099-MISC for them at all, and the agency’s digital-asset page states plainly that “income from digital assets is taxable,” so the date and amount of each payment have to come from a log the holder keeps.
The 2024 Draft Reached Further Than the Forms That Arrived
The statement that reached holders in early 2026 was narrower than the one first proposed. The Infrastructure Investment and Jobs Act, signed in November 2021, amended the broker-reporting section of the tax code, and the regulations the IRS proposed in August 2023 defined “broker” widely enough that industry advocates at a November 2023 hearing said it stretched the statutory definition “beyond the breaking point.”
The draft released in April 2024 asked each broker to tick a box saying whether it was a kiosk operator, a digital asset payment processor, a hosted wallet provider, an unhosted wallet provider or something else, the Journal of Accountancy reported. The draft also had a box for wallet addresses, another worry for the industry at the time.
The same report cited IRS estimates of 13 million to 16 million affected owners and up to 9,500 brokers, and one agency official had put the expected volume at 8 billion Form 1099-DA information returns.
Two decisions cut that reach back. The final regulations for custodial brokers, T.D. 10000, were published on July 9, 2024, and a December 2024 rule that would have reached decentralized-finance platforms was undone by H.J.Res.25, a Congressional Review Act resolution President Trump signed on April 10, 2025, according to a release from the Ways and Means Committee. A swap made from a self-custodied wallet on a decentralized exchange therefore generally produced no 1099-DA for 2025, which puts it in box I or box L.
Sales Made in 2026 Bring Broker Basis for Some Lots
This year’s sales start the second stage, for the covered lots described above. Coinbase has said its forms for tax year 2026 will show cost basis alongside gross proceeds, and the 2026 instructions point brokers to Notice 2025-33 for transitional relief from backup withholding.
For holders, the job changes rather than ends. A covered lot will come with the broker’s figure attached, and the check becomes whether that figure matches the purchase log, fees included. Coinbase lets customers choose HIFO, LIFO or FIFO in its tax-center settings, and the method picked decides which lots a sale draws from, so the log and the broker have to agree on that as well.
Returns still being filed this week fall outside that change. Thursday, October 15, is the extended deadline for 2025 returns, and those run on last year’s forms, basis gap included. The first 1099-DA carrying a broker’s basis figure covers tax year 2026 and should reach holders in early 2027. LineUps, whose redemption guide supplied the prize figures above, also publishes video at LineUps on YouTube.
Image by Evander Hale
