What to Do With 1099-DA
Important: Form 1099-DA is for digital assets and is a draft IRS form that has not yet been released. The IRS plans to release it in 2026 for 2025 taxes as they now have more concrete guidance and understanding on the taxation of the sale and exchange of virtual currencies. This step-by-step page will be updated once this form is finalized by the IRS and implemented into our tax filing application, thus the details below may not be accurate until this is complete.
For 2023 year taxes, follow these instructions for digital asset sale or exchanges.
If you sold or exchanged one or more digital assets,, you may receive a 1099-DA. You can add this to your eFile account to generate the needed forms and add it to your taxable income.
2. Where Do I Enter Data?
Instructions pending: See below how to manually enter the 1099-DA data. eFile will guide you through entering all types of income. You will be prompted to enter Form 1099-DA under the Investments section. Have any forms ready and enter them as they apply; answer "Yes" that you received a 1099-DA to be guided through each section - you can still fill out this section if you did not get a 1099-DA. If you sold multiple assets, you would need to individually report each line item since they have unique dates and descriptions.
3. How to Manually Add Data
Instructions Pending: To manually add your form, navigate to Federal Taxes > Income > Scroll to the Investment section and click on Tell us about your Investments and enter "1099-DA." You can then fill out the details based on your form(s). If you sold multiple assets, you would need to individually report each line item since they have unique dates and descriptions.
5. How to Add, Delete a Form or Page
Other investment forms include Forms 1099-DIV and 1099-INT for interest and dividends, 1099-B for capital gains (stocks, etc.), and 1099-S for the sale of your home. See all other 1099 forms you may have received.
What Is Form 1099-DA?
1099 forms are filled out and sent twice: once from the broker or business to the IRS and once to the taxpayer. This is to assure that a taxpayer files the same information from their 1099 that appears on the one the IRS was sent. If you sold or exchanged a digital asset, then the broker will send the IRS a 1099 reporting your gains and losses and they will send you this copy as well to report on your taxes.
The final IRS regulations, shaped by over 44,000 public comments, require brokers to report digital asset sale and exchange transactions starting in 2025 via Form 1099-DA, in line with the 2021 Infrastructure Investment and Jobs Act. These rules aim to balance industry concerns and enhance tax compliance in digital assets, focusing initially on custodial brokers like trading platforms and digital wallets, while delaying rules for non-custodial and decentralized brokers for further consideration.
Additionally, the regulations establish guidelines for calculating basis, gain, and loss from digital asset transactions, along with provisions for backup withholding. Recognizing implementation challenges, the IRS will offer transitional relief and waivers for penalties on certain transactions. Real estate professionals must report digital asset values in transactions starting January 1, 2026. For stablecoins and NFTs, there's an optional aggregate reporting method when sales exceed thresholds, and transactional reporting for PDAP transactions above de minimis thresholds ensures compliance and simplicity in reporting for taxpayers and brokers.
This page will be updated once this form is finalized and made public.
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