The first filing season for Form 1099-DA, the new information return for digital asset sales, is under way, and the forms landing in investors' inboxes carry a notable gap: they report what a sale brought in, not what the investor paid. On March 5, 2026, the Treasury Department and the IRS added a second development, proposing regulations that would let crypto brokers deliver those statements electronically without offering a paper alternative.
What changed
The proposed rules, published as REG-105064-25, give brokers an optional process for obtaining a customer's consent to electronic delivery of 1099-DA statements. The customer would have to give what the proposal calls positive consent, meaning an explicit action such as checking a box, clicking a button or completing a fill-in screen. Brokers would have to keep statements accessible and notify customers when a tax document has been furnished.
Treasury and the IRS said printing and mailing paper statements could be unnecessarily burdensome given the volume of transactions in digital asset markets. The IRS release says brokers could use the new process for statements furnished on or after January 1, 2027. Comments are due by May 5, 2026. The agencies also issued Notice 2026-4, asking for comments on electronic delivery of Form 1099-B and other payee statements, which could eventually affect how brokerage customers receive their year-end composite forms.
Why the 2025 forms show no cost basis
For sales made in 2025, brokers are required to report only gross proceeds, according to Thomson Reuters. One practitioner quoted there described the form as mainly a flag to the IRS that the taxpayer transacted in crypto.
Mandatory basis reporting begins with 2026 sales, but only for covered securities: digital assets acquired on or after January 1, 2026, and held in the same broker account until sale. Assets bought earlier, or moved in from an outside wallet, are noncovered, and brokers do not have to report their basis. Practitioners estimate only about 5% of customer transactions may qualify as covered in the first year, so the documentation burden will stay with investors for some time.
Two earlier pieces of guidance shape the transition. Notice 2024-56 gives brokers good-faith penalty relief and delays backup withholding. Rev. Proc. 2024-28 requires basis to be tracked account by account starting January 1, 2025, replacing the universal method many investors had used.
Who is affected
The gap matters most for long-time holders with large embedded gains, investors who moved coins between exchanges and self-custody wallets, and anyone who used several platforms. Each sale still has to be reported on Form 8949 with a basis figure the taxpayer can support. When the IRS matches a return against a 1099-DA that lists proceeds only, a missing or unsupported basis can look like a gain equal to the entire sale price.
The after-tax math
Example: a married couple with income well above the top capital gains bracket sold bitcoin in 2025 for $500,000. They bought it in 2021 for $200,000 on one exchange and later moved it to another. The 1099-DA from the selling exchange shows $500,000 of proceeds and no basis.
| Scenario | Reported gain | Federal tax at 20% plus 3.8% NIIT |
|---|---|---|
| Basis documented at $200,000 | $300,000 | $71,400 |
| Basis not supported | $500,000 | $119,000 |
The $47,600 difference comes entirely from records the form does not contain. The 20% rate is the top federal rate on long-term gains, and the 3.8% net investment income tax applies above set income thresholds, according to the IRS. State income tax would come on top in most states.
Moves to discuss with your advisor
- Assembling purchase records, exchange exports and wallet transfer histories for every account that had a 2025 sale, before preparing Form 8949.
- Checking that basis follows the account-by-account method required since January 1, 2025, rather than a pooled calculation across platforms.
- Reviewing whether consolidating future purchases in a single broker account would produce covered securities with reported basis from 2026 onward.
- Confirming electronic delivery settings with each exchange so a year-end statement is not missed once paperless consent becomes common.
Households with significant digital asset activity often find it worthwhile to walk through these records with a CPA who handles crypto reporting.
What to watch
The comment period on the electronic delivery proposal closes May 5, 2026, and final rules would follow. Notice 2026-4 signals that similar changes could reach traditional brokerage statements. The larger shift arrives with 2026 sales, when the first basis figures appear on 1099-DAs for assets bought and held inside a single broker account.
Sources
- First reported Treasury, IRS issue proposed regulations to make it easier for digital asset brokers to provide 1099-DA statements electronically (IR-2026-29) — IRS
- Internal Revenue Bulletin 2026-13: Electronic Furnishing of Payee Statements Regarding Digital Asset Sales by Brokers (REG-105064-25) and Notice 2026-4 — IRS
- Form 1099-DA Debut Will Test Broker, Taxpayer Readiness in Transition Year — Thomson Reuters
- Topic no. 409, Capital gains and losses — IRS
- Topic no. 559, Net investment income tax — IRS
After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.
