Form 1099-DA — “Digital Asset Proceeds From Broker Transactions” — is the IRS’s information return for reporting the sale, exchange, or disposition of digital assets. It was mandated by the Infrastructure Investment and Jobs Act of 2021 and finalized through regulations under IRC § 6045. Novus Compliance automates the entire 1099-DA workflow, from data ingestion to IRS-compliant XML transmission through the Information Returns Intake System (IRIS).
Who must file Form 1099-DA?
A broker includes any person who, in the ordinary course of a trade or business, stands ready to effect sales of digital assets to be made by others. You are considered a broker if you:
- Regularly offer to redeem digital assets that were created or issued by you, or
- Effect dispositions of customers’ digital assets as an agent, a dealer, or a digital asset middleman.
Generally, only a U.S. digital asset broker is required to report on Form 1099-DA — a U.S. person (other than a foreign branch) or a U.S. branch treated as a U.S. person that effects sales of digital assets on behalf of others [citation:5].
The 1099-DA reporting timeline
The 1099-DA regime is being implemented in phases. Understanding where you are on this timeline is critical to compliance.
| Tax Year | Gross Proceeds | Cost Basis | Filing Deadline |
|---|---|---|---|
| 2025 (filed 2026) | Required | Not required | Recipients: Feb 17, 2026 IRS e-file: Mar 31, 2026 |
| 2026 (filed 2027) | Required | Mandatory for covered securities | Recipients: Feb 15, 2027 IRS e-file: Mar 31, 2027 |
For tax year 2025, the IRS provided a transitional basis-reporting waiver — brokers were not required to report basis information for any sales in 2025 [citation:6]. For 2026 sales, basis information is now mandatory for covered assets (digital assets acquired through your platform on or after January 1, 2025) [citation:6]. Brokers that do not check Box 9 for noncovered security sales are subject to penalties for failure to report basis correctly [citation:6].
Covered vs. noncovered securities
The distinction between covered and noncovered securities determines whether you must report cost basis on Form 1099-DA.
| Category | Definition | Basis Reporting |
|---|---|---|
| Covered security | Digital asset acquired through your platform on or after January 1, 2025, and held continuously in the same account | Mandatory — Boxes 1d, 1g, 2, and 6 must be completed |
| Noncovered security | Digital asset acquired before January 1, 2025, or transferred in from an external wallet or another broker | Voluntary — Check Box 9; if checked, boxes 1d, 1g, 1h, 1i, and 6 may be left blank without penalty |
If you check Box 9 for a noncovered security and choose to complete basis fields voluntarily, you are not subject to penalties under section 6721 or 6722 for failure to report or furnish this information correctly [citation:7]. However, if you do not check Box 9, you are subject to penalties for failure to report basis correctly — even if the security is noncovered [citation:7].
Account-by-account tracking is now required
The IRS has disallowed the “universal method” of aggregating cost basis across multiple wallets. Starting January 1, 2025, basis must be tracked and reported on an account-by-account basis. Revenue Procedure 2024-28 provides a safe harbor for allocating existing basis to assets held in specific wallets as of that date.
De minimis exceptions
The 2026 instructions introduce de minimis rules for certain sales. The following transactions need not be reported on Form 1099-DA [citation:6]:
- Sales by a processor of digital asset payments (PDAP) of $600 or less during a year
- Qualifying stablecoin sales of $10,000 or less
- Sales of specified NFTs of $600 or less
E-filing is mandatory through IRIS
Starting tax year 2023, filers with 10 or more information returns must file electronically. Paper filing is only allowed if you file fewer than 10 total returns [citation:9]. Form 1099-DA is only accepted through IRIS — the legacy FIRE system does not support this form [citation:9]. IRIS validates data at submission and issues real-time acknowledgements, with accepted or rejected status typically returned within 6 hours [citation:4].
How Novus Compliance helps with 1099-DA
Whether you are preparing your first 1099-DA filing or scaling an existing digital asset reporting operation, Novus Compliance delivers end-to-end automation built for the IRIS platform.
Ready to File Form 1099-DA With Confidence?
Whether you’re preparing your first 1099-DA filing, managing cost basis reporting for covered securities, or scaling your digital asset reporting operations, Novus Compliance gives you the accuracy, security, and auditability you need.
Schedule a Technical Scoping Call →Related resources
- 1099 Filing Software for IRS IRIS
- IDES 1099 Filing for Foreign Filers
- A2A 1099 Filing
- 1099-DA Digital Asset Reporting Guide
- Free 1099 IRIS Excel Templates
Frequently asked questions
Do I need to file Form 1099-DA?
If you are considered a “broker” under IRC § 6045 — including exchanges, custodians, payment processors, and certain wallet providers — you likely have a filing obligation for digital asset dispositions by U.S. customers. A broker includes any person who, in the ordinary course of a trade or business, stands ready to effect sales of digital assets to be made by others [citation:5].
What is the difference between gross proceeds and cost basis reporting on 1099-DA?
Gross proceeds reporting applies to all digital asset sales from 2025 onward. Cost basis reporting becomes mandatory for covered securities — assets acquired through your platform on or after January 1, 2025 — starting with the 2026 tax year [citation:6].
What happens if I don’t check Box 9 for a noncovered security?
If you do not check Box 9, you are subject to penalties under sections 6721 and 6722 for failure to report or furnish basis information correctly — even if you are reporting the sale of a noncovered security [citation:7]. Checking Box 9 for noncovered securities protects you from these penalties.
Can Novus Compliance file 1099-DA on my behalf?
Yes. As a registered Third-Party Transmitter with the IRS, we can sign, encrypt, and transmit your filings directly through IRIS. You retain full visibility and auditability throughout the process.
Does Novus support corrections for 1099-DA?
Yes. Our platform tracks the original submission identifiers (UniqueRecordId) assigned by IRIS and generates the correct correction payload without manual lookup.
What are the de minimis exceptions for 1099-DA?
Sales by a processor of digital asset payments (PDAP) of $600 or less during a year, qualifying stablecoin sales of $10,000 or less, and sales of specified NFTs of $600 or less need not be reported on Form 1099-DA [citation:6].