This AIM Financial tax-form blog, covers IRS Form 1099-DA: Digital Asset Proceeds From Broker Transactions. This is especially timely for cryptocurrency investors: brokers began reporting certain digital asset sales on Form 1099-DA for transactions starting in 2025, and many 2025 forms do not include cost basis. Taxpayers must still report taxable digital asset activity even if they never receive this form.

Cryptocurrency and other digital assets have created new tax questions for individuals, investors, and business owners. Whether you bought Bitcoin, sold Ethereum, traded one cryptocurrency for another, or sold a non-fungible token (NFT), understanding the federal tax rules is important when preparing your income tax return.

Beginning with transactions in 2025, brokers began using IRS Form 1099-DA, Digital Asset Proceeds From Broker Transactions, to report certain digital asset transactions. Taxpayers received these forms in 2026 for applicable 2025 activity. However, the information on the form may not include everything needed to calculate the taxable gain or loss.

For taxpayers in Grand Rapids, Kentwood, Wyoming, and throughout West Michigan, AIM Financial can help explain digital asset tax documents and prepare income tax returns that account for cryptocurrency and other taxable transactions.

What Is IRS Form 1099-DA?

Form 1099-DA is an IRS information return used by brokers to report proceeds from certain digital asset transactions. Depending on the applicable reporting rules and tax year, the form may also include cost-basis information.

Digital assets can include:

• Cryptocurrency: Examples include Bitcoin and Ethereum.
• Stablecoins: Digital assets designed to maintain a relatively stable value, often in relation to a currency such as the U.S. dollar.
• Non-fungible tokens (NFTs): Digital assets that can represent unique items, artwork, collectibles, or other rights.

You may receive Form 1099-DA if a broker handled a qualifying sale or other disposition of digital assets for you. Not every platform, wallet, or transaction will necessarily result in this form.

The IRS explains the form and its requirements on its official About Form 1099-DA page. <Cite refs={[“turn923875search1″,”turn923875search3”]}/>

Why Is Form 1099-DA Important?

The form gives taxpayers information that can help them report digital asset activity. Brokers generally report gross proceeds for covered transactions, and cost-basis reporting is being phased in under the applicable rules.

There is an important distinction between reporting proceeds and calculating taxable profit.

For example, suppose you purchased cryptocurrency for $2,000 and later sold it for $3,500. If your adjusted basis is $2,000 and there are no other adjustments, the transaction generally produces a $1,500 gain.

If you sold the same cryptocurrency for $1,400, the transaction would generally produce a $600 loss before considering any special tax rules.

The proceeds alone do not tell the whole story. You need to determine your basis and consider applicable fees, transaction details, and tax rules.

For the 2025 tax year, many Form 1099-DA statements do not include basis information. Taxpayers may need their own purchase records and transaction histories to calculate gains and losses accurately. <Cite refs={[“turn923875search8″,”turn923875search10”]}/>

Which Cryptocurrency Transactions May Be Taxable?

A common misconception is that cryptocurrency is taxable only when it is converted into U.S. dollars. That is not necessarily true.

Depending on the circumstances, potentially taxable transactions can include:

Selling cryptocurrency for cash. If you sell digital assets for U.S. dollars or another currency, you generally calculate the gain or loss using the proceeds and adjusted basis.

Trading one cryptocurrency for another. Exchanging Bitcoin for Ethereum, for example, can be a taxable disposition even if you never receive dollars.

Using cryptocurrency to purchase goods or services. Spending digital assets can trigger a gain or loss based on the difference between the asset’s adjusted basis and its value at the time of the transaction.

Selling an NFT. The tax treatment depends on the asset, how it was held, and the circumstances of the sale.

Other activities, such as staking rewards, mining, or receiving cryptocurrency as payment for services, may generate income rather than—or in addition to—a capital gain or loss. The proper treatment depends on the facts and applicable tax rules.

By contrast, merely purchasing cryptocurrency and continuing to hold it generally does not create a taxable gain at that point. Moving digital assets between wallets you own generally is not a taxable sale solely because of the transfer, although transaction fees and other circumstances should be reviewed.

The IRS provides additional explanations in its digital asset tax guidance. <Cite refs={[“turn923875search3″,”turn923875search4”]}/>

How Do You Calculate Cryptocurrency Gains and Losses?

For many investments held as capital assets, the basic calculation is:

Amount realized − adjusted cost basis = capital gain or loss

Your amount realized generally reflects the value received in the transaction, adjusted as required by the applicable rules. Your basis generally reflects what you paid for the asset, with relevant adjustments.

For example, suppose you purchase a digital asset for $1,200 and later sell it for $1,900. If your adjusted basis is $1,200 and no other adjustments apply, you generally have a $700 gain.

If the asset is held as a capital asset, the holding period generally determines whether the gain or loss is short-term or long-term. Short-term capital gains are generally taxed at ordinary income tax rates, while eligible net long-term capital gains may qualify for special rates.

Keep records of the date acquired, amount paid, date sold, proceeds, transaction fees, and the digital asset units involved. If you used several exchanges or wallets, you may need to combine information from multiple sources to establish an accurate history.

Where Is Form 1099-DA Reported on Your Tax Return?

The correct reporting method depends on the nature of the digital asset transaction.

For individuals, sales of digital assets held as capital assets are generally reported using Form 8949, Sales and Other Dispositions of Capital Assets, and then summarized on Schedule D, Capital Gains and Losses, when required.

Some transactions may qualify for a reporting exception when the broker provides the required proceeds and basis information and no adjustment is needed. Follow the current IRS instructions to determine whether a transaction must be listed on Form 8949.

Digital asset activity that generates ordinary income, such as certain rewards or payments for services, may need to be reported on a different form or schedule.

The important point is that Form 1099-DA is not itself your completed income tax return. Its information must be reviewed and entered in the proper place. <Cite refs={[“turn923875search4″,”turn923875search2”]}/>

What If You Do Not Receive Form 1099-DA?

Not receiving Form 1099-DA does not automatically mean you have no tax reporting obligations.

You may not receive the form for certain transactions, including activity conducted through some foreign platforms or arrangements that do not fall within the applicable broker reporting requirements. Nevertheless, taxable digital asset income, gains, and losses generally must still be reported.

Keep your own transaction records, including information from exchanges, wallets, and other platforms. If a form contains incorrect information, contact the issuer to request a correction and retain copies of your correspondence.

The IRS specifically states that taxpayers must report applicable digital asset transactions whether or not they receive an information return. <Cite refs={[“turn923875search2″,”turn923875search4”]}/>

Common Cryptocurrency Tax Mistakes to Avoid

When preparing your tax return, be careful to avoid these common errors:

• Reporting only cryptocurrency sales converted into dollars while overlooking crypto-to-crypto exchanges.
• Treating the proceeds reported by a broker as taxable profit without calculating basis.
• Forgetting transactions conducted through a second exchange or digital wallet.
• Failing to report income from certain staking rewards, mining, or services.
• Assuming that a transfer between personal wallets is automatically a taxable sale.
• Using incomplete records to calculate gains or losses.
• Ignoring the digital asset question on Form 1040.

The digital asset question on the federal individual income tax return must be answered according to the wording and instructions for the applicable tax year. A taxpayer may need to answer “yes” or “no” even when the taxpayer did not receive Form 1099-DA.

How AIM Financial Can Help With Cryptocurrency Tax Preparation

Digital asset tax reporting can become complicated when you have multiple exchanges, frequent trades, missing basis information, NFTs, staking rewards, or cryptocurrency used for business transactions.

AIM Financial helps taxpayers in Grand Rapids, Kentwood, Wyoming, and throughout West Michigan prepare their federal and Michigan income tax returns. If you received Form 1099-DA, traded cryptocurrency, sold digital assets, or are unsure how to report digital asset income, contact AIM Financial for tax preparation assistance.

Before your appointment, gather all Forms 1099-DA, exchange statements, wallet histories, purchase records, sale confirmations, and records of fees or rewards. Having complete documentation can make it easier to calculate taxable amounts and identify transactions that need special attention.

Final Thoughts

IRS Form 1099-DA is an important development in digital asset tax reporting. It helps brokers report certain transactions, but taxpayers remain responsible for reporting their taxable activity accurately.

Understanding proceeds, cost basis, taxable exchanges, digital asset income, and the appropriate tax forms can help you avoid common reporting mistakes.

For assistance with cryptocurrency tax preparation, Form 1099-DA, Form 8949, Schedule D, and other tax filing questions, contact AIM Financial, serving Grand Rapids, Kentwood, Wyoming, and the wider West Michigan community.