Guides › Covered vs Noncovered Crypto on 1099-DA: Basis Rules

Covered vs Noncovered Crypto on 1099-DA: Basis Rules

Short answer: Under the 2026 IRS instructions, brokers must report basis for covered digital assets, and may (but needn't) report it for noncovered ones. A digital asset is covered only if it was acquired after 2025 in an account where the broker provided custodial services, and held there until the sale.

Covered

Acquired after 2025 for cash, stored-value cards, different digital assets or property or services, in a custodial account at that broker, and still held in it.

Noncovered (list from the instructions)

• The broker did not provide custodial services when you acquired it.
• Acquired before 2026.
• Transferred in to the broker.
• Certain exempt-recipient or exempt-foreign-person cases and some foreign-intermediary securities.

What shows up on the form

• Covered: basis in box 1g, plus boxes 1d, 2 and 6 completed.
• Noncovered: the broker may check box 9; then it needn't complete 1d, 1g, 1h, 1i or 6, and box 2 isn't checked. If it reports basis voluntarily and checks box 9, it isn't penalized for errors in that information.
• "Enter -0- in box 1g only if the digital asset sold actually had a basis of zero." A blank means not reported.
• Form 8949 checkbox codes: G short-term with basis reported, H short-term without, J long-term with, K long-term without, Y if the holding period is unknown.
• Transfer-in details appear in boxes 12a (units) and 12b (date).

The IRS example

A customer bought units in April 2022, April 2026 and August 2026 and sold all in June 2027. The 2026 purchases are covered; the 2022 units are noncovered. The broker reports three separate 1099-DAs (short-term covered, long-term covered, and the noncovered ones).

What you do

You must calculate basis before you file; keep records of purchases before 2026 and of transfers (missing basis, moved between exchanges).

FAQ

Does a blank box 1g mean zero? No; see the -0- rule above.

Which lot is sold first? Unless you identify units adequately and on time, the broker generally first reports the sale of the earliest units purchased (box 1g instructions).

What we could not verify

• How a particular broker treated your account (ask it).
• Treatment of assets acquired in 2026 before the broker's systems were ready (not covered by the instructions we read).

Sources

• IRS, Instructions for Form 1099-DA (2026) — https://www.irs.gov/instructions/i1099da (read October 17, 2026)
• IRS, Understanding your Form 1099-DA (page updated June 28, 2026) — https://www.irs.gov/businesses/understanding-your-form-1099-da (read October 17, 2026)

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Not tax advice. Examples use made-up figures. Nothing here has been reviewed by a tax professional. We may earn commissions from affiliate links where marked; see the disclosure.