Crypto investors face tax filing chaos with incomplete 1099-DA forms

The introduction of Form 1099-DA has turned the 2025 filing season into a complex manual exercise for digital asset holders. While brokers were required to report gross proceeds, most omitted the original cost basis, leaving taxpayers to calculate gains and losses independently. For an active trader, this often means manually cross-referencing years of transaction histories, fees, and wallet transfers to establish accurate figures.

Sharon Yip, founder of Crypto Tax Advisors, points to significant discrepancies in the data provided by platforms. In one instance, a client’s exchange reported less than $100,000 in stablecoin proceeds despite the user executing over $300,000 in trades. Similar issues persist with late delivery, as seen with Kraken, which reportedly issued some forms just two weeks before the initial April deadline. Andrew Duca of Awaken Tax warns that blindly copying figures from these documents is a recipe for error, as the IRS prioritizes actual gain or loss reporting over potentially flawed exchange statements.

Industry experts like Andrew Gordon of Digital Asset Tax Action note that existing tax software often lacks the capability to automatically reconcile these new forms. Without machine-readable data, taxpayers are forced into tedious manual entry for hundreds of transactions. The IRS maintains that recipients should not wait for corrections if a form is inaccurate, but rather rely on personal records to ensure compliance. While mandatory cost basis reporting begins for specific assets in 2026, the current environment forces investors to act as their own auditors to avoid penalties.