IRS Form 1099-DA: What Crypto Brokers Must Report

Starting tax year 2025, the IRS requires crypto brokers to issue Form 1099-DA for digital asset transactions. This new form captures sales, exchanges, and airdrop income over $10 in a calendar year, enhancing transparency and compliance.

Overview of Form 1099-DA

Form 1099-DA is similar to 1099-B but tailored to digital assets. Brokers must detail gross proceeds, cost basis, and transaction date for each disposition. Income from staking rewards, airdrops, and hard forks also appears in Box 3 as “Other Income.”

Reporting Requirements

• Transactions: All trades, swaps, and disposals over $10 must be reported.
• Income Events: Staking rewards, airdrops, and mining receipts aggregated annually.
• Customer Statements: Brokers must provide a summary statement by January 31, 2026.

Deadlines & Filing Process

Brokers must furnish 1099-DAs to customers by January 31 and file with the IRS by February 28 (paper) or March 31 (electronic). Late filings incur incremental penalties per form, capped annually.

Penalties for Non-Compliance

Failure to report accurately can lead to fines starting at $50 per form, increasing with delay, plus interest. Willful misconduct may trigger higher penalties and potential audits.

Best Practices for Brokers

• Implement automated transaction tracking and cost basis calculations.
• Validate customer wallets and transaction data monthly.
• Engage specialized tax software providers to streamline 1099-DA generation.