Form 1099-DA and US Crypto Basis Reporting

Introduction

Most tax writing about crypto describes the returns you file. This page is about the one you do not: the information return a custodial broker files with the United States Internal Revenue Service describing what you disposed of during the year.

That distinction sounds procedural and is not. An information return creates a figure the IRS holds about you before you have said anything, and it creates it from data the broker has rather than data you have. Where those two disagree — and for crypto they frequently do — the difference has to be reconciled on your return, by you, with evidence.

Three things are worth establishing before the detail. This page is about the United States throughout; every rule on it is a US rule and none of it describes any other jurisdiction. It carries no tax rates, because rates are not what makes this subject difficult. And it names no exchange or broker, because the obligations described here attach to a category of business rather than to any particular company.

The shape of the difficulty is worth seeing before the mechanics. The form reports what you disposed of and what you received for it. The column that says what those units cost you is frequently blank, because for a great many holdings the broker never saw the acquisition. So the figure reaching the IRS is a gross one, and the number that turns it into a gain is supplied by you or it is not supplied at all.

Two further features make this more than a paperwork problem. Basis is tracked account by account rather than across everything you own, which is the exact opposite of the pooled answer the United Kingdom gives, and it means two venues' forms will not add up to your position. And an identification of which units left has to exist no later than the disposal itself — not by the time you file, and not by the time anyone asks.

The page also covers two things widely described as settled that are not. Relief granted for the first reporting years expires by its own terms rather than by any further act, so nothing has to happen for it to end. And a repeal that removed one reporting rule left the obligations it did not mention entirely in place — a distinction most of the coverage lost, and the one most likely to be repeated back to you as reassurance.

One note on method. Every rule below is read from the regulation, the notice or the statute that states it, each named in the sources section with the date it was read. Where a matter is genuinely unsettled the page says so rather than picking a side, because on this subject the confidently stated summaries have been the unreliable ones.

If you are looking for the UK equivalent — how a disposal is matched and how pooled cost works there — that is a different regime entirely, and it lives on our UK crypto tax reporting rules.

Two Kinds of Return, and Only One of Them Is Yours

The United States tax system runs on two parallel streams of paper. You file returns describing your own position. Third parties who handled your money file information returns describing what they saw. The second stream exists so that the first can be checked against something.

Form 1099-DA belongs to the second stream. A custodial broker files it, reporting digital asset dispositions it processed for you, and sends you a copy. You do not complete it, you cannot amend it directly, and its contents are the broker's statement rather than yours.

Why the asymmetry bites here specifically

For a conventional brokerage account the two streams mostly agree, because the broker watched the whole life of the position: it saw the purchase, it held the asset, it processed the sale. For digital assets that is often untrue. Assets arrive by transfer from somewhere the broker cannot see, having been acquired at a price the broker never observed.

So the broker can report what you sold for with complete confidence, and frequently cannot report what you paid at all. That single gap is the origin of most of the complexity on this page, and of the reconciliation work that lands on the taxpayer.

The returns you file — and how the gains that come out of all this reach them — are covered in our complete crypto tax guide. This page stays on the broker's side of the line.

A Note on the Word "Broker"

This page says "custodial broker" repeatedly, and the phrase is doing more work than it looks. In ordinary speech a broker is anyone who arranges a trade for you. In United States tax law it is a defined category, and whether a given business falls inside that definition determines whether it files anything about you at all.

Why the boundary has been contested

The businesses at the centre of the definitional argument are the ones that help a disposal happen without ever holding the assets. A service that provides an interface, or routes an instruction, is arranging something — but it never has custody, never sees your acquisition, and in many cases holds no information about you at all.

Whether such a service is a broker for reporting purposes is exactly what the repealed rule addressed, and it is why that repeal has its own section below rather than a passing mention. The definitional question is the whole of that dispute.

How this page uses the term

Throughout, "custodial broker" means a business that holds digital assets for customers and processes dispositions for them — the clearest case, and the one every part of the framework described here applies to without argument.

Where a service you use does not hold your assets, do not assume the obligations on this page attach to it, and equally do not assume that the absence of a form means the absence of a taxable event on your side. Those are separate questions, and only one of them is about the service.

That second half is the one worth carrying into January. The arrival of a form tells you a business decided it had a filing obligation about you; the non-arrival of one tells you nothing whatsoever about whether you had a disposal. A holder who reconciles only against the forms that arrived has reconciled against a list assembled by other people for their own purposes, and the gaps in that list are invisible precisely because nothing was sent to mark them.

What Form 1099-DA Reports, and What It Leaves Blank

The requirement that United States brokers report gross proceeds on Form 1099-DA applies beginning in 2025. That is not a proposal or a phase that later moved: IRS Notice 2026-20 states in its own text that the relief it grants "does not affect the requirement for brokers to report gross proceeds on the Form 1099-DA beginning in 2025."

Gross proceeds is the number the broker is certain about. It watched the disposal happen, in its own systems, for a consideration it processed. Whatever else is unclear, that figure is not.

The column that is often empty

Cost is the other half of a gain, and it is the half a broker may simply not know. If units arrived in your account by transfer rather than by purchase there, the broker never saw what you paid for them, and it has no basis figure to report.

The practical consequence is worth stating plainly, because it is the opposite of what a reader familiar with conventional brokerage statements expects. A 1099-DA showing large proceeds and no basis is not evidence that your gain equals your proceeds. It is evidence that the broker could not see your cost. The number that belongs on your return is the one you can substantiate, and producing it is your work rather than the broker's.

What the IRS sees in the meantime

Until you file, the IRS holds proceeds without cost. That is not an accusation and it does not create a liability by itself, but it does explain why a return that reports a much smaller gain than the information returns imply is a return that should be supported by records you could show someone.

Which is why the records question is not separable from the reporting question, and why it has its own treatment in our records and reconstruction guide.

Adequate Identification, and Why the Channel Matters

When you hold units of the same digital asset acquired at different prices and dispose of some of them, United States rules let you identify which units left — rather than accepting a default. Doing that validly is called making an adequate identification, and the requirement is set out at section 1.1012-1(j)(3)(ii) of the regulations.

The subtlety, and the reason a whole IRS notice exists about it, is not whether you may identify units. It is where the identification has to be recorded for it to count.

The default that applies if you do nothing

An identification that is not validly made does not leave the question open — a default takes over, and the units treated as sold are decided for you. Which method suits which situation, and how the wider family of cost-basis methods differs across jurisdictions, is the subject of our cost basis methods guide. This page is about the mechanics of making the identification stick.

Communicating versus recording

The distinction the rules draw is between an identification communicated to your broker and one recorded in your own books. Those are not the same act, and for units held in a broker's custody the regulation's baseline position is the former — the broker needs to be told.

That baseline assumes brokers can receive such instructions. In 2025 and 2026 many could not, and that gap between what the regulation assumed and what the market could do is precisely what the IRS addressed.

What IRS Notice 2026-20 Did

IRS Notice 2026-20 is titled "Extension of temporary relief under section 1.1012-1(j)(3)(ii)" and was published in Internal Revenue Bulletin 2026-15 on 6 April 2026. Its stated purpose is narrow: it extends, for an additional year, the temporary relief that section 4.02 of Notice 2025-7 had provided.

What the relief permits

Under Notice 2026-20, a taxpayer may make an adequate identification for units held in a broker's custody in one of two ways recorded on their own books and records: by identifying the particular units no later than the date and time of the sale, disposition or transfer; or by recording a standing order.

In substance the notice is relief about a channel. It does not change which units you may identify, or what identification means. It changes where the record has to live for the identification to be valid.

The relief period, and that it expires by its own terms

Section 3.03 of Notice 2026-20 defines the relief period as beginning on 1 January 2025 and ending on 31 December 2026. The predecessor notice had covered calendar 2025 alone; this one adds 2026.

Section 5 is explicit about the boundary: taxpayers may rely on the relief only for the duration of the relief period, and may not rely on it for sales, dispositions and transfers made after the relief period ends. The relief is self-expiring. From 1 January 2027 onward it does not apply on its own terms, and unless the IRS extended it again after April 2026 the identification has to reach the broker under the regulation. Anyone reading this after that date should check irs.gov for a later notice rather than assuming either outcome.

Two further provisions worth knowing

Section 4.03 disapplies, during the relief period, the rule under which a broker offering a single method is deemed to have been given a standing order. Section 4.05 provides that for 2026 disposals the books-and-records identification governs regardless of whether the information the broker reported to the taxpayer matches the taxpayer's books and records — which is the provision that most directly addresses the mismatch problem this page opened with.

Making an Identification Stick: Two Forms, One Timing Rule

Notice 2026-20 offers two ways to record an identification on your own books, and they behave quite differently in practice. The choice between them is worth making deliberately rather than by default.

Identifying the particular units

The first form is specific: identify the particular units, on your books and records, no later than the date and time of the sale, disposition or transfer. Each disposal gets its own identification, made at or before the moment it happens.

This is the more precise instrument. It lets you decide, disposal by disposal, which units leave — which is the entire point of having an identification rule rather than a default. It is also the more demanding one, because it requires an act contemporaneous with every disposal.

Recording a standing order

The second form is a standing order recorded on your books and records: a rule set once that governs subsequent disposals rather than a decision taken each time.

The appeal is obvious — it removes the per-disposal act, which for an active holder is the difference between a workable process and one that quietly stops happening. The cost is equally obvious: a standing order applies whether or not it suits any particular disposal, and changing it later does not reach backwards.

The timing rule that decides whether either works

Both forms share one requirement, and it is the part most easily lost in summary: the record must exist no later than the date and time of the disposal.

That is a rule against reconstruction. An identification assembled afterwards — chosen once the prices are known, when it is clear which answer is preferable — is not an identification made no later than the disposal. The regulation's structure assumes a decision taken without hindsight, and a spreadsheet updated in the following March is not evidence of one.

The practical reading is unglamorous and matters more than any of the finer points: whichever form you use, the record has to be created as you go. A contemporaneous note with a timestamp is worth considerably more than a tidy reconstruction, and the tidiness of the reconstruction is not what the rule asks about.

What the choice between units is actually worth, in money, is easier to see on a fixed set of trades than in the abstract: our method comparison runs one ledger through several selection methods and shows both the gain each reports and the cost each leaves behind.

What Notice 2026-20 Did Not Change

Because the notice is easy to summarise loosely, it is worth recording what it leaves untouched — using its own words rather than a paraphrase.

• Form 1099-DA reporting. The notice states that it "does not affect the requirement for brokers to report gross proceeds on the Form 1099-DA beginning in 2025". It is not a deferral of broker reporting, and describing it as one inverts what it says.
• The account-by-account basis rule. The notice did not change how basis is tracked. That obligation is separate and is not temporary.
• Which units you may identify. The relief is about the record, not the selection.

The reason the IRS gave, and why it matters to a reader

The notice explains itself: some custodial brokers did not have in place the technology needed to accept specific instructions communicated by taxpayers, but were expected to complete building and implementing the necessary systems during 2026.

That sentence is the strongest available argument against assuming a further extension. The relief was granted to bridge a capability gap the IRS expected to close, and a bridge is not usually extended once the far side is built. Planning on the basis that it will be extended again is planning on something the notice's own reasoning points away from.

Basis Is Tracked Per Account, Not Across Your Whole Holding

Since 1 January 2025, United States basis in digital assets must be tracked per wallet or per account. This one is not temporary relief and not a transitional arrangement: it is the standing rule, which is why the present tense is correct here and is not correct for most of the dates elsewhere on this page.

What it replaced

The practice it displaced is usually called the universal method: treating every unit of a given asset, wherever held, as one undifferentiated stock from which disposals are drawn. That approach produces a single running basis across all your venues at once.

Under a per-account rule it does not work, because each account keeps its own basis history. The same asset held in three places has three separate stories, and a disposal from one of them draws on that one's basis rather than on a blended figure.

Why this is precisely the opposite of the UK answer

It is worth flagging the contrast, because holders who read both systems often carry an assumption across and get it backwards in one direction or the other.

The United Kingdom pools by asset: the same token in three venues is one pool, because pooling follows the token rather than the venue. The United States tracks by account: the same token in three accounts is three basis histories. Neither is a variation on the other, and software configured for one produces a materially wrong answer under the other. The UK mechanics are set out in full on our UK crypto tax reporting rules.

The practical consequence for records

A per-account rule turns transfers into events you must be able to account for. Moving units between your own accounts does not create a taxable disposal, but it does move basis from one history to another, and a record that shows only trades will not tell you which account held what at the moment of a sale.

The One-Time Transition, and Why It Is History

Moving from a universal basis position to a per-account one created an obvious problem: what happens to basis that was pooled across venues under the old approach? Revenue Procedure 2024-28 was the answer — a one-time transition safe harbour for allocating unused basis onto a wallet-by-wallet or account-by-account footing as of 1 January 2025.

How its deadlines were keyed

The safe harbour's timing was tied to events rather than to a single calendar date, and for most taxpayers those events have already occurred. A global allocation had to be described in the taxpayer's books and records before 1 January 2025. A specific-unit allocation had to be complete before the earlier of two things: the first sale, disposition or transfer of that type of digital asset on or after 1 January 2025, and the due date — including extensions — of the return for the year that included 1 January 2025.

That outer bound for an extended filer was the extended due date of the 2025 return. This page deliberately does not tell you that you have time remaining against it, because a sentence built that way becomes false on a calendar day and nothing on this site would notice.

If you did not make an allocation

Then this page cannot tell you the safe harbour remains open to you, and no general article honestly can — the answer depends on your filing position, your extensions and what you have already reported. That is a question for a United States tax professional, and it is worth asking specifically rather than generally.

What is safe to say is the shape of the problem. Basis that was never allocated does not disappear, but it also does not sit neatly in the account where a later disposal happens, and reconstructing it after the fact is considerably harder than allocating it would have been.

The Rule That Was Repealed, and What That Did and Did Not Settle

A second set of United States regulations would have extended broker reporting beyond custodial businesses to certain non-custodial front-end services. It was finalised at the end of December 2024 and then disapproved by Congress.

What happened, and the two dates that get conflated

Public Law 119-5, approved on 10 April 2025, disapproved that rule under the Congressional Review Act. The regulatory text itself was not removed from the Code of Federal Regulations until 11 July 2025.

Those are two real dates describing two different acts, and collapsing them produces a statement that is wrong in detail — the rule was not "removed from the regulations in April 2025". More importantly, the Congressional Review Act's own effect is stronger than removal: a disapproved rule is treated as though it had never taken effect.

What the statute bars, and what it does not

Under title 5, section 801(b)(2) of the United States Code, a rule that has been disapproved may not be reissued in substantially the same form, and a new rule that is substantially the same may not be issued, unless later legislation authorises it. That bar comes from the statute itself — not from the document that removed the regulatory text, which does not discuss it.

So the accurate statement of today's position has two halves and no forecast in it: no reporting rule of that kind is in force, and reinstating one would require legislation rather than a new regulation. Both of those are checkable facts about the present. What does not follow from them is a prediction that no such reporting will ever exist, because legislation is exactly the route the statute leaves open.

What continues regardless

Custodial broker reporting on Form 1099-DA is unaffected by any of this, and it is confirmed from two directions: the IRS final regulations did not include reporting requirements for the non-custodial businesses at issue, and Notice 2026-20 restates in its own text that the requirement to report gross proceeds beginning in 2025 stands.

If you hold assets at a custodial venue, the repeal changed nothing about what that venue files about you.

The same repeal is referenced from the other direction in our yield and staking taxation guide, where it appears alongside the income-side treatment of staking rewards rather than the reporting-side treatment here.

Reconciling a Broker Figure You Disagree With

Sooner or later a 1099-DA will say something you believe is wrong, or will leave blank something you can fill in. That is an ordinary situation with an ordinary answer, and panic is not part of it.

The broker's figure is a statement, not a determination

An information return records what a third party observed. It does not decide your tax. Where your records support a different figure, the return you file reports what you can substantiate, and the difference is explained rather than ignored.

What makes that work is evidence, and the standard is unglamorous: acquisition records, transfer records showing where units came from, and a basis history that someone else could follow. The mechanics of assembling that are the subject of our records and reconstruction guide.

Where the reconciliation actually lands

The forms on which a United States taxpayer reports dispositions and reconciles them against information returns are covered in our complete crypto tax guide, which is the right place for them because they are part of the return you file rather than the return filed about you.

What belongs here is the preparation. A reconciliation is easy when you already know which units left and what they cost, and it is very hard when you are working that out retrospectively from a proceeds figure somebody else produced.

Three Ways a Broker Form and Your Records Legitimately Disagree

Not every mismatch is an error by somebody. Several are structural — the predictable result of the broker and the taxpayer having different views of the same holding. Recognising which kind you are looking at saves a great deal of time.

• Units that arrived by transfer. The broker reports proceeds it processed and has no basis for units it never saw acquired. Your records have the acquisition; its records have the sale. Nothing is wrong; the two halves simply live in different places, and joining them is your job.
• Acquisition costs the broker did not price. Fees, and costs incurred outside the venue, form part of what you paid but are not part of what the broker observed at the moment of disposal. A basis figure that omits them is not false — it is answering a narrower question than the one your return asks.
• Disposals the broker did not process at all. A swap executed elsewhere, a transfer that turned out to be a disposal, a disposal at a venue that files nothing — each is a taxable event with no matching information return. Absence of a form is not absence of an obligation, and this is the disagreement that runs in the direction taxpayers notice least.

The one worth taking seriously

Of those three, the first two produce a return that reports less gain than the information returns imply, which is uncomfortable but defensible with records. The third produces a return that reports less gain than actually arose, which is a different kind of problem entirely.

So the reconciliation worth doing first is not the one between your figures and the broker's. It is the one between your figures and your own complete history — including the parts no broker ever saw.

Commissions, Fees and the Costs the Form Cannot See

Cost is not only what you handed over for the asset. Acquiring an investment usually involves paying somebody to arrange it, and those amounts are part of what the position cost you — yet several of them are structurally invisible to the form your broker files.

Which costs the broker can see

A commission charged by the venue where a purchase executed is visible to that venue. If the same venue later processes the disposal and has the acquisition in its own records, it is in a position to account for both.

That is the comfortable case and it is not the common one. Once units move between venues, the commission paid on acquisition sits in one place and the disposal happens in another, and the second venue has no view of the first venue's charges.

The costs nobody is positioned to report

Network fees paid to move assets, and charges levied by a service that never handled the disposal, fall outside every broker's view by construction. They are real expenditure attached to a real position, and no information return will ever mention them.

The consequence is asymmetric in a way worth noticing. Omitting them does not produce an error the IRS will query — it produces a return reporting more gain than arose, which nobody is likely to challenge. Costs left out of your own records are simply costs you have quietly decided not to claim.

Keeping them findable

The practical difficulty is not knowing that fees count. It is that fee records live in a different export, in a different format, often on a venue you stopped trading on two years ago. Assembling them retrospectively is the expensive version of a task that is cheap if done as you go, which is the same lesson the identification timing rule teaches from another direction.

What Changes When You Use More Than One Venue

A holder whose entire position sits at one custodial venue has the easiest version of everything on this page. The moment a portfolio spans several places, three separate problems arrive together.

Basis follows the account

Per-account tracking means each venue carries its own basis history, and moving units between your own accounts moves basis with them without creating a taxable disposal. That is a record-keeping event with no transaction to remind you it happened.

A trading history that shows only buys and sells will not tell you which account held which units at the moment of a disposal — and under a per-account rule that is precisely the question the computation asks.

The forms will not add up to your position

Each venue files about what it saw. Sum the forms and you do not get your investment history; you get the union of several partial views, with the parts nobody observed missing entirely and no marker where they should be.

This is why a reconciliation against the forms is the second job rather than the first. The first is a complete history of your own, against which the forms are checked — not the other way round.

Identification is a per-venue question too

If the relief described above ends and identifications must reach the broker, the answer becomes venue-specific: each place you hold assets either can accept a lot identification or cannot, and the ones that cannot constrain what you can do with the units held there.

A holder with a single venue has one question to ask. A holder with five has five, and the execution details may differ at each.

Why This Is Harder for Digital Assets Than for Shares

Broker reporting is not a new idea. The framework this sits inside was built for securities, where it works well enough that most taxpayers never think about it. Understanding why it fits digital assets less comfortably explains most of the friction on this page.

The assumption of a closed loop

Conventional broker reporting assumes the broker sees the whole life of a position. You open an account, you buy through it, the asset sits in custody, and you eventually sell through the same account. Under those conditions the broker knows the purchase price, the holding period and the sale price, and it can report a complete picture without asking you anything.

Digital assets break that assumption routinely rather than exceptionally. Units are bought in one place, moved to self-custody, moved again, and sold somewhere that has no visibility of any of it. The loop is open by design, because the ability to hold your own assets is one of the properties people acquire them for.

What follows from the mismatch

Two things follow, and both are visible in the rules described above. The identification question needed special handling because a broker may not be positioned to receive or act on your instruction. The basis question needed a transition rule because the old practice — treating a holding as one undifferentiated stock — was exactly what an open loop encourages.

Neither is a temporary awkwardness that better software will remove. They follow from a genuine structural difference between an asset that can leave the system and one that cannot, and a reader who understands that will find the specific rules much less arbitrary than they first appear.

What the End of the Relief Period Changes

Notice 2026-20's relief period ends on 31 December 2026 by the notice's own terms. It is worth being concrete about what that boundary does and does not do.

What changes

For sales, dispositions and transfers made after the relief period ends, the notice states taxpayers may not rely on the relief. The identification requirement reverts to the regulation — which contemplates the identification reaching the broker rather than living only in your own records.

Practically, that turns a question about your bookkeeping into a question about your venue's capability: can it accept a lot identification, and by what mechanism? That is a question worth asking of a venue before it matters rather than during a disposal.

What does not change at that boundary

Nothing about Form 1099-DA reporting, which the notice says in terms it does not affect. Nothing about per-account basis tracking, which is a standing rule rather than a relief. And nothing retrospective: identifications validly made on your books and records during the relief period were validly made, and the end of the period does not reach back to them.

The honest caveat about what comes next

Whether the IRS extended this relief again after April 2026 is not something this page can tell you, because the page was written before any such decision would have been published. What it can tell you is where the answer lives: a later notice would appear in the Internal Revenue Bulletin, and the absence of one means the boundary described above stands.

That is deliberately not a prediction. This page has already declined one prediction about United States digital asset reporting; making a different one here would be inconsistent.

Getting It Wrong Costs Something in Both Directions

Most writing about tax reporting treats error as one-sided: the risk of under-reporting. For digital assets the more common outcome is the other one, and it is worth naming because it goes unnoticed by design.

Reporting more gain than arose

This happens by omission rather than by decision. A basis figure that leaves out acquisition costs, a transfer whose original purchase price was never recovered, a commission paid on a venue you no longer use — each of them raises the gain you report above the gain you actually made.

Nothing flags it. The information returns will not contradict you, because you are reporting a figure larger than the one they support. No enquiry follows, no letter arrives, and the amount involved is simply paid. It is the quietest way to be wrong about your own investment, and for holders with a long or scattered history it is probably the more common one.

Reporting less gain than arose

The other direction is noisier and better understood. Its distinctive feature for digital assets is that it frequently arises from incompleteness rather than intent — a disposal at a venue that files nothing, a swap treated as a non-event, a transfer that turned out to be a disposal.

The defence against it is not caution in your figures. It is completeness in your history, because a figure computed from a partial record is wrong whether or not the arithmetic on it is careful.

What both have in common

Neither is primarily a computation problem. Both come from a record that is missing something, and both are cheap to prevent and expensive to repair. That is the same conclusion the identification timing rule reaches from another angle, and the same one the per-account basis rule forces on anyone using several venues.

What a workable record actually contains

Not a specification, and not a substitute for advice — but the shape of what makes the rest of this page tractable:

• Every acquisition, with its date, quantity, consideration and the venue or address it happened at;
• Every transfer between your own accounts, so basis can be followed rather than inferred;
• Fees and commissions attached to the event they belong to, not aggregated at the end of a year;
• For each disposal, the identification you made and when you made it;
• A copy of what each venue reported about you, kept alongside your own figures rather than instead of them.

A holder with those five can answer any question on this page. A holder without them is reconstructing, and reconstruction is where both directions of error come from.

Conclusion

The form at the centre of this page is one you never fill in, and that is what makes it worth understanding. A custodial broker reports what you disposed of with complete confidence and frequently reports nothing about what you paid, because the units reached it from somewhere it could not see.

Everything else follows from that gap. The identification rules needed temporary relief because brokers could not always receive an instruction the regulation assumed they could. Basis moved onto a per-account footing, which is the opposite of the United Kingdom's per-asset pooling and produces a materially different answer from the same trades. And a transition safe harbour existed to carry old positions across, keyed to events that have already happened for most people.

Two things are worth carrying away rather than any specific date. First, an information return is a statement by a third party about what it observed, not a determination of your tax — and where your records support a different figure, the figure you can substantiate is the one that belongs on your return. Second, the identification rules reward a record made as you go and are indifferent to a tidy reconstruction produced later.

And one boundary: Notice 2026-20's relief ends on 31 December 2026 by its own terms, and the notice's own explanation — that brokers were expected to finish building the systems the relief worked around — is the strongest available reason not to plan on another extension.

Underneath all of it sits a single asymmetry worth remembering. Your broker knows exactly what you sold your assets for and frequently knows nothing about what they cost you. Every complication described above is a consequence of that imbalance, and every practical remedy amounts to holding the other half of the information carefully enough that you can produce it when the form arrives carrying only its own.

Sources

United States primary materials, cited by their own identifiers. Where a document has both a publication date and an operative date, both are given above in the sentence that uses them.

• IRS Notice 2026-20, "Extension of temporary relief under section 1.1012-1(j)(3)(ii)", Internal Revenue Bulletin 2026-15, published 6 April 2026. Read 21 September 2026. irs.gov
• IRS Notice 2025-7, Internal Revenue Bulletin 2025-5, published 27 January 2025 — the relief Notice 2026-20 extends. Read 21 September 2026. irs.gov
• Revenue Procedure 2024-28 — the one-time transition safe harbour for allocating unused basis. Read 21 September 2026. irs.gov
• Public Law 119-5, approved 10 April 2025 — the joint resolution disapproving the non-custodial broker reporting rule. Read 21 September 2026. congress.gov
• Title 5, section 801(b)(2) of the United States Code — the bar on reissuing a disapproved rule in substantially the same form. Read 21 September 2026. uscode.house.gov
• Treasury Decision 10021, 89 FR 106928, published 30 December 2024 — the rule that was later disapproved. Read 21 September 2026. federalregister.gov
• What a custodial venue collects about you, and when it collects it, is set out from the account-opening side in our guide to the first thirty days on an exchange.

Frequently Asked Questions

Does Form 1099-DA tell the IRS what I owe?

No. Form 1099-DA is a United States information return filed by a custodial broker reporting the gross proceeds of digital asset dispositions it processed for you. It reports what you sold for, not what you owe, and for units that reached the broker by transfer it frequently reports no cost figure at all. A form showing large proceeds and a blank basis column is evidence that the broker could not see what you paid, not evidence that your entire proceeds are gain.

Did IRS Notice 2026-20 delay Form 1099-DA reporting?

No, and the notice says so in its own text: it "does not affect the requirement for brokers to report gross proceeds on the Form 1099-DA beginning in 2025". Notice 2026-20, published on 6 April 2026, extended a different and narrower relief — about where a United States taxpayer records a lot identification for units held in a broker's custody, allowing books-and-records identification instead of a communication to the broker.

How long does the Notice 2026-20 relief last?

Section 3.03 of IRS Notice 2026-20 defines its relief period as 1 January 2025 to 31 December 2026, and section 5 states that taxpayers may not rely on the relief for sales, dispositions and transfers made after the relief period ends. It is self-expiring. Anyone reading after that date should check the Internal Revenue Bulletin for a later notice rather than assuming the relief was either extended or allowed to lapse.

Can I decide which units I sold after the fact?

Not under the United States identification rules as described in IRS Notice 2026-20. Both permitted forms — identifying particular units, or recording a standing order — require the record to exist on your books and records no later than the date and time of the sale, disposition or transfer. An identification assembled afterwards, once prices are known, does not meet that timing requirement however carefully it is documented.

Do I track US crypto basis across all my accounts together?

No. Since 1 January 2025 United States basis in digital assets is tracked per wallet or per account, which ended the practice of treating a holding as one undifferentiated stock across every venue. This is the opposite of the United Kingdom approach, where the same token held in several places forms a single section 104 pool — so software or advice written for one country produces a materially wrong answer under the other.

Does the repeal of the DeFi broker rule mean no such reporting will ever exist?

That does not follow. Public Law 119-5, approved on 10 April 2025, disapproved the rule under the Congressional Review Act, and title 5 section 801(b)(2) of the United States Code bars reissuing a substantially similar rule unless later legislation authorises it. The accurate present-tense statement is that no reporting rule of that kind is in force and reinstating one would require legislation rather than a new regulation — which is a description of the route, not a prediction that nobody will take it.

My broker's figure disagrees with my records. What now?

An information return records what a third party observed; it does not determine your tax. Where your own records support a different figure, the return you file reports what you can substantiate and the difference is explained rather than ignored. Several disagreements are structural rather than erroneous — units that arrived by transfer, acquisition costs the broker never priced, and disposals it did not process at all — and the last of those is the one that runs in the direction taxpayers notice least.

Financial Disclaimer

This content is not financial advice. All information provided is for educational purposes only. Cryptocurrency investments carry significant investment risk, and past performance does not guarantee future results. Always do your own research and consult a qualified financial advisor before making investment decisions.