The IRS Form 1099-DA reports digital asset proceeds from broker transactions. Starting with the 2025 tax year, users will receive a 1099-DA from any exchange where they completed a taxable digital asset transaction. Each exchange also sends a copy of the form directly to the IRS.
1099-DA forms are typically consolidated annual summaries of your transactions for each digital asset on a given exchange. For example, if you traded ETH, SOL, and BTC on one exchange during the year, you would generally receive three separate 1099-DA forms from that exchange—one per asset.
The form summarizes the total proceeds associated with each asset. In future years, exchanges may also attempt to report cost basis, which could theoretically allow them to estimate gains or losses. However, there are many caveats that may make those figures inaccurate. Importantly, for the 2025 tax year, exchanges are not required to report cost basis on the 1099-DA.
Why am I receiving these forms?
The 1099-DA was introduced by the IRS to improve visibility into digital asset tax activity. It coincides with the new By-Wallet Basis Tax Rules, which shift cost basis tracking from a global asset pool to a platform-specific (wallet-specific) model.
Beginning with the 2025 tax year, digital asset brokers (exchanges) are required to issue 1099-DA forms to applicable users. You can expect to receive these forms each January from every exchange you used during the prior year.
Long term, the IRS envisions using these forms to cross-check reported gains, losses, and income against what taxpayers file on their returns.
Important: You will not receive a 1099-DA from non-broker sources. This includes:
Self-custody wallets
Wallet providers
Decentralized exchanges (DEXs)
dApps or other DeFi protocols
These sources are not considered broker-dealers and generally do not issue 1099-DA forms.
What do I do with 1099-DA forms?
For the 2025 tax year, there is relatively little you need to do with the 1099-DA. Since it reports proceeds only, it does not by itself determine gains or losses. However, you may want to:
Compare the proceeds amounts against ZenLedger (or other tax software) to confirm transactions were imported correctly.
In future years, 1099-DA forms may serve as a validation reference, but there will still be significant caveats:
Exchanges only know the cost basis of assets acquired on their platform.
Assets transferred in from other wallets or exchanges will not have accurate basis information.
Exchanges may not know which cost basis method you use (FIFO, LIFO, HIFO, Average), leading to discrepancies.
As a result, exchange-reported gains or losses may not match your true tax liability.
How does this change the 8949 forms?
The introduction of the 1099-DA also coincides with an important update to Form 8949.
You must now separate transactions not only by short-term vs. long-term, but also by whether the transaction was reported on a 1099-DA:
Previously, digital asset transactions were never reported on a 1099, so Box C applied universally.
Now, transactions may fall under different reporting categories.
2025 IRS Form 8949: short term transactions will need to be split by options G, H, and I
This means your 8949 may need to be split across multiple forms with different boxes checked (e.g., G, H, or I for short-term transactions).
How ZenLedger handles this
ZenLedger automatically manages this complexity for you:
By default, ZenLedger assumes that all exchange transactions are reported on a 1099-DA starting in 2025.
For the 2025 tax year, since cost basis is not reported:
Short-term exchange transactions default to Box H
In future years (when basis may be reported):
Short-term exchange transactions will default to Box G
All other short-term transactions default to Box I (Long-term transactions follow the same logic, using Boxes J, K, and L.)
When generating your 8949 forms, ZenLedger automatically sorts transactions into the correct categories.
We plan to introduce source-level customization in the future, allowing users to adjust these assumptions on a per-exchange basis.
Disclaimer
This article is for informational purposes only and does not constitute tax advice. Tax rules and reporting requirements can vary based on individual circumstances. Always consult a qualified tax professional for guidance specific to your situation.
