Coinbase has begun issuing a new tax form to the IRS for the 2025 tax year: Form 1099-DA, covering reportable crypto sales and exchanges. The exchange sends the form directly to the IRS and makes a copy available to the customer, which might suggest the tax calculation is largely done. It isn't.
The form documents proceeds from crypto-to-dollar sales as well as crypto-to-crypto exchanges, which are treated as taxable dispositions even when no cash changes hands. What it reports are gross proceeds totals — the cumulative amount from all dispositions — not net profit or taxable income. Coinbase may issue separate forms for rewards or other income items outside of asset dispositions.
The Missing Half of the Equation
The central gap is cost basis. The first-year version of the form generally reports gross proceeds without it, meaning the IRS receives the sale side of the transaction while the taxpayer remains responsible for reconstructing the purchase side. That reconstruction gets harder the more a user's crypto has moved around: if someone bought Bitcoin on another exchange years ago, transferred it to a hardware wallet, and later deposited it on Coinbase to sell, Coinbase has no way to know the original purchase price. Its tax center cannot independently verify acquisitions made on other platforms, classify transactions in outside wallets, or identify wallet ownership unless the user manually supplies that information.
What Changes — and What Doesn't — in 2026
Starting with 2026 transactions, brokers are required to report basis for “covered digital assets,” defined as assets acquired after 2025 and held continuously at a single broker. Anything transferred in from elsewhere remains “noncovered,” which means the basis field stays blank on the form and the burden of documentation stays with the taxpayer.
Where Filers Get Tripped Up
The most common mistake is treating gross proceeds as if they were the taxable gain. A $20,000 sale against a $15,000 cost basis should be reported as a $5,000 gain, not $20,000 of income. Other frequent errors include accepting a zero basis for transferred-in assets rather than tracking down the original purchase records, reporting Coinbase activity in isolation instead of reconciling it against every exchange and wallet a person has used, and skipping transactions simply because no tax form arrived for them.
To avoid those errors, users need to download complete transaction histories from every platform they've used, build a chronological ledger that matches transfers across exchanges, and preserve acquisition dates and basis information as assets move between accounts. That means locating trade confirmations, exchange exports or wallet records where necessary, and distinguishing between activity on the custodial Coinbase exchange versus the self-custody Coinbase Wallet.
The underlying principle is straightforward even if the paperwork isn't: a taxpayer's obligation is based on the transaction itself, not merely on whether a platform happened to cross an information-reporting threshold. Form 1099-DA narrows the gap between what exchanges report and what the IRS expects, but for now it doesn't close it.
