What is Form 1099-DA?
Form 1099-DA is the IRS information return that brokers use "to report digital asset proceeds from broker transactions," according to the IRS page for the form. As of October 23, 2026, brokers report the gross proceeds of Bitcoin sales made from 2025 onward. For sales from 2026 onward, they also report cost basis on Bitcoin bought from 2026 and kept with the same broker. Holding Bitcoin in your own wallet creates no Form 1099-DA.
Key points
The 2025 Instructions for Form 1099-DA state that "for each digital asset sale that a broker has effected for a customer in 2025, the broker must complete Form 1099-DA."
The same instructions state that "brokers are not required to report basis information with respect to sales effected in 2025."
The 2026 Instructions for Form 1099-DA require basis reporting for covered securities, defined as digital assets acquired after 2025 in a custodial account and held there until sale.
Publication 1099 (2026) sets February 15 of the following year as the due date for furnishing Form 1099-DA to customers.
Public Law 119-5, approved April 10, 2025, provides that the IRS rule extending broker reporting to decentralized finance "shall have no force or effect."
IRS Notice 2025-33 states that backup withholding "will not be required on any digital asset sale effected by a broker during calendar year 2025 or calendar year 2026."
Who has to file Form 1099-DA?
Brokers that take possession of your Bitcoin do. The 2026 Instructions for Form 1099-DA state that "generally, only a U.S. digital asset broker is required to report on Form 1099-DA."
The IRS fact sheet on the final regulations names the brokers covered: custodial trading platforms, certain hosted wallet providers, digital asset kiosks and certain processors of digital asset payments. The instructions add that a digital asset middleman includes a person who owns or operates one or more digital asset kiosks.
The rules come from Treasury Decision 10000, final regulations published in the Federal Register on July 9, 2024 (89 FR 56480) and effective September 9, 2024.
Does a hardware or software wallet file Form 1099-DA?
No, if that is all it does. The 2026 Instructions state that providers of hardware or software that let users control their own private keys are not middlemen, as long as they provide no other services. The IRS fact sheet adds that the final regulations impose no reporting on decentralized or non-custodial brokers that never take possession of the assets.
What happened to the DeFi broker rule?
Congress voided it. On December 30, 2024, the IRS published Treasury Decision 10021, a rule meant to treat certain decentralized finance participants as brokers. Public Law 119-5, approved April 10, 2025, disapproves that rule (89 Fed. Reg. 106928) under the Congressional Review Act, and provides that "such rule shall have no force or effect."
What does Form 1099-DA report?
It reports each sale your broker carried out for you. The 2026 Instructions list the boxes, including:
box 1a and 1b: the code and name of the digital asset
box 1c: the number of units sold
box 1d and 1e: the dates acquired and sold
box 1f: proceeds
box 1g: cost or other basis
box 4: federal income tax withheld
box 8: whether the broker relied on acquisition information you provided
box 9: whether the asset is a noncovered security
box 12a and 12b: the number of units transferred in and the transfer-in date
Box 12 matters for self-custody. It records Bitcoin that came into the account from somewhere else, such as your own wallet.
When did Form 1099-DA reporting start?
With sales made in 2025. The IRS digital assets page states that brokers must report gross proceeds for transactions on or after January 1, 2025, and basis for certain transactions on or after January 1, 2026.
The 2025 Instructions describe 2025 as a transition year in which brokers report proceeds but "are not required to report basis information."
When will I receive my Form 1099-DA?
By mid-February. Under Publication 1099 (2026), the due date for furnishing Form 1099-DA to recipients is "February 15 of the year following the calendar year for which you are furnishing the form." If that date falls on a weekend or legal holiday, the due date moves to the next business day.
Does Form 1099-DA show my Bitcoin cost basis?
Only for "covered securities." The 2026 Instructions define a covered security as a digital asset "acquired after 2025 for cash, stored-value cards, different digital assets" in a customer's custodial account and held there until it is sold. Brokers must report basis for those.
For everything else, the broker "is not required to report basis information." It may report basis voluntarily and check box 9 to flag the asset as noncovered.
Why does my 1099-DA have no basis for Bitcoin I moved in?
Because Bitcoin transferred in is noncovered. The 2026 Instructions state that a digital asset transferred in to a custodial broker is a noncovered security, and the units transferred in appear in boxes 12a and 12b.
Your own records still count, but not on the form. Under question 7 of the IRS broker reporting FAQs, a broker may use acquisition information you provide "for lot ordering purposes only," not to report basis on Form 1099-DA.
Sales still go on your return either way. The IRS digital assets page directs that sales or exchanges of capital assets be reported on Form 8949, and that you keep records of acquisitions and dispositions.
Does Form 1099-DA report transfers to my own wallet?
No. A withdrawal to your own wallet is not a sale. Under question 1 of the IRS broker reporting FAQs, a custodial broker that transfers assets at the customer's direction generally has no reporting duty for that transfer, because the rule covers only "sale transactions that a broker effects for its customers."
Moving coins between your own wallets is not taxable either. Question 81 of the IRS digital asset FAQs treats a transfer between wallets or accounts you own as a non-taxable event. The exception is any digital asset you use, or that is withheld, to pay transaction fees for the transfer.
How is Bitcoin cost basis tracked from 2025?
Wallet by wallet. Since January 1, 2025, basis is tracked separately for each wallet or account. Under question 82 of the IRS digital asset FAQs, for units in an unhosted wallet, "you may identify the basis and holding period of any units," provided you identify them by the time of the transaction and keep adequate records.
If you do not, question 86 applies a first-in, first-out rule within that wallet. Units are treated as sold "in order of time from the earliest date on which units of the same digital asset in this wallet were acquired." Under question 96, keeping a duplicate record of private keys does not turn several wallets into one.
What is the Rev. Proc. 2024-28 safe harbor?
It is a one-time method for moving old basis into the new system. Revenue Procedure 2024-28 lets you allocate unused basis to the digital asset units held in each wallet or account as of January 1, 2025. The allocation is irrevocable.
The procedure offers two methods:
Specific unit allocation. You assign units of unused basis to the units in each wallet. It must be completed before the earlier of your first sale, disposition or transfer of that asset on or after January 1, 2025, or the due date (with extensions) of your 2025 return.
Global allocation. You use a rule that orders all units of unused basis. The rule must be described in your books before January 1, 2025, and the allocation completed by the later of those two dates.
The safe harbor covers only units acquired before 2025 and still held on January 1, 2025. It does not fix the amount of your basis, which you must still substantiate.
Will my broker withhold tax on Bitcoin sales?
Not for 2025 or 2026 sales. IRS Notice 2025-33 states that backup withholding "will not be required on any digital asset sale effected by a broker during calendar year 2025 or calendar year 2026."
For 2027 sales, the Notice lets brokers rely on uncertified taxpayer identification numbers of preexisting customers if the name and number match through the IRS TIN Matching Program. The 2026 Instructions tell brokers to request a taxpayer identification number on Form W-9, and report any backup withholding in box 4.
How do I answer the digital asset question on Form 1040?
It depends on what you did during the year. The IRS digital assets page explains that Form 1040 asks whether, during the year, you received a digital asset as a reward, award or payment, or sold, exchanged or otherwise disposed of one.
You answer "No" if you only held Bitcoin, bought it with real currency, or moved it between wallets you own without paying a fee in digital assets. You answer "Yes" if you received Bitcoin as payment or from mining, staking or a hard fork airdrop, or if you sold, traded or spent it.
The same page lists where income goes. Mining and staking income goes on Schedule 1, and gifts of digital assets on Form 709. Under question 58 of the IRS digital asset FAQs, Bitcoin received for services is income equal to "the fair market value of the digital assets, measured in U.S. dollars, when received."
What does Form 1099-DA mean for Bitcoin held in self-custody?
Self-custody is untouched until you sell through a broker. The IRS digital assets page states that the IRS does not require registration of digital assets. It warns that letters with QR codes asking you to register on a "compliance portal" are scams.
The record-keeping falls on you:
Bitcoin moved from your own wallet to a broker and later sold there shows as noncovered, with no basis reported.
The wallet-by-wallet rules in questions 82 and 86 of the IRS FAQs decide which units you sold, so identifying units at the time of the transaction matters.
Only digital assets used to pay transfer fees turn a move between your own wallets into a reportable event.
Under question 50 of the IRS digital asset FAQs, Bitcoin held for more than one year produces a long-term gain or loss, so acquisition dates matter as much as cost.
3. Q&A
What is Form 1099-DA?
It is the IRS information return that brokers use "to report digital asset proceeds from broker transactions," according to the IRS page for the form. Brokers that take possession of your Bitcoin file it for each sale they carry out for you, starting with sales in 2025, and furnish you a copy.
Does Form 1099-DA report my cost basis?
Only for covered securities. Under the 2026 Instructions, that means digital assets acquired after 2025 in a custodial account and held there until sale. For 2025 sales, the 2025 Instructions state that brokers are not required to report basis information.
Why is the basis box empty for Bitcoin I sent to my exchange?
Bitcoin transferred in to a custodial broker is a noncovered security under the 2026 Instructions, so the broker need not report its basis. The transfer appears in boxes 12a and 12b. You still report the sale on Form 8949, using your own acquisition records.
Does withdrawing Bitcoin to my own wallet trigger a Form 1099-DA?
No. Under question 1 of the IRS broker reporting FAQs, the reporting rule covers sales a broker effects for customers, not transfers made at the customer's direction. A transfer between wallets you own is also non-taxable, except for digital assets used to pay transfer fees.
Does a hardware wallet company send me a Form 1099-DA?
No, if it only provides the device or software. The 2026 Instructions state that providers of hardware or software letting users control private keys are not middlemen if they provide no other services. Only U.S. digital asset brokers generally report on Form 1099-DA.
When is Form 1099-DA due?
Publication 1099 (2026) sets the due date for furnishing Form 1099-DA to recipients as February 15 of the year following the calendar year reported. When that date falls on a weekend or legal holiday, the due date becomes the next business day.
Will my broker withhold tax from my Bitcoin sales?
Not for 2025 or 2026. IRS Notice 2025-33 states that backup withholding will not be required on any digital asset sale effected by a broker in calendar year 2025 or 2026. Brokers still request your taxpayer identification number on Form W-9.
This article is general information and not legal advice.
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