By Mike Ring | Updated June 2026
Your Coinbase 1099-DA landed in your inbox. It shows a number — sometimes a very large number. Your TurboTax import is ready to go. You’re tempted to just hit file.
Don’t.
For most Coinbase users who’ve held crypto for more than five minutes outside of Coinbase’s own platform, that form is incomplete in a way that will cost you real money if you use it uncritically. The proceeds are real. The cost basis is missing. And the IRS only sees the proceeds side.
This guide covers exactly what Coinbase’s 1099-DA includes, how Coinbase handles cost basis (and why it often can’t), the specific traps that catch Coinbase users, and how to reconstruct missing basis before you file.
For the broader picture on missing basis across all exchanges, see our pillar guide on 1099-DA missing cost basis. Or jump straight to the 1099-DA missing cost basis solution page if you already know what you’re dealing with.
What Is Form 1099-DA and Why Does Coinbase Send It?
The requirement for brokers to report digital asset transactions is a result of changes to Internal Revenue Code §6045 made by the Infrastructure Investment and Jobs Act, signed in late 2021. The IRS took its time building the infrastructure, but starting with 2025 transactions, the mandate is live.
The new Form 1099-DA is used by brokers to report certain transactions involving digital assets that took place beginning in calendar year 2025. Think of it as the crypto equivalent of the 1099-B you’d get from a stock broker — same idea, different asset class, with a lot more ambiguity baked in.
Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is the IRS information return that custodial digital asset brokers must use to report certain digital asset sales and exchanges to both taxpayers and the government, beginning with transactions on or after January 1, 2025.
Starting with the 2025 tax year, Coinbase is required to issue IRS Form 1099-DA to all US customers who sold or exchanged a qualifying digital asset in tax year 2025.
The official form and instructions are published at IRS.gov — Form 1099-DA. That’s your primary source if you want to read the actual boxes and their definitions.
What Your Coinbase 1099-DA Actually Includes
Here’s what’s on the form for 2025 transactions:
- Your name and taxpayer identification number
- The digital asset sold (BTC, ETH, etc.)
- Date sold
- Gross proceeds from the sale or exchange
- Date acquired, if Coinbase has it
- Cost basis — marked as “noncovered” for 2025
- Short- or long-term classification, if determinable
Gross proceeds reflect the cumulative amount received from all asset dispositions, including sales or exchanges less transaction fees. This is not your net gain or balance, but the total value from all transactions, including small trades.
That last point is the one that creates inbox chaos every spring. Your 1099-DA might show $400,000 in proceeds. That’s not $400,000 in profit. That’s $400,000 in total value received from disposals — before any cost basis is subtracted. If you bought those assets for $390,000, your actual gain is $10,000. But the IRS only has the $400,000 figure on record. Your job is to supply the basis.
Like other forms in the 1099 series, Form 1099-DA provides the IRS with third-party reporting that can be matched against a taxpayer’s return. That matching happens. When there’s a mismatch between what’s on the form and what’s on your return, you get a notice.
What Coinbase Reports to the IRS in 2025
For tax year 2025, your Form 1099-DA from Coinbase will report only the proceeds from the sale or exchange of your crypto assets. Cost basis will be reported to you, but for the 2025 tax year, it will not be reported to the IRS.
Read that again. Coinbase may show cost basis on the copy they send you — but that figure does not go to the IRS. So even if your Coinbase PDF looks complete, the IRS is receiving a proceeds-only document. You are responsible for correctly reporting basis on Form 8949.
Covered vs. Noncovered: The Core Distinction
This is where most people get confused, so let’s be direct.
Noncovered assets are assets for which Coinbase is not required to report cost basis to the IRS. Noncovered assets refers to crypto assets for which an exchange or broker is not required to report cost basis to the IRS. This applies to a crypto asset that was acquired on Coinbase before January 1, 2026.
That means almost everything you sold in 2025 is noncovered. If you bought BTC in 2020, 2021, 2022, 2023, or 2024 — on Coinbase or anywhere else — it’s noncovered for 2025 purposes.
Covered assets — the category where Coinbase will eventually report full basis — apply to assets narrowly defined as digital assets acquired on or after January 1, 2026, and held continuously in a broker’s account.
Brokers must report gross proceeds for transactions effected on or after Jan. 1, 2025. Brokers must report basis on certain transactions effected on or after Jan. 1, 2026.
So the phase-in is: proceeds-only for 2025, proceeds + basis for covered assets starting in 2026. Noncovered remains your problem, forever.
The Specific Gotchas Coinbase Users Hit
Let’s go through the failure modes, because they’re predictable.
1. Transferred-In Assets
This is the biggest one. Brokers typically do not have full cost basis information for every asset. This is because customers may have transferred crypto from an external wallet or exchange and then sold it on a different platform.
If you bought ETH on Kraken in 2021, transferred it to Coinbase in 2022, and sold it on Coinbase in 2025 — Coinbase has no idea what you paid for that ETH. It sees an inbound transfer of ETH with no purchase record attached. The cost basis on your 1099-DA will be blank or marked as unknown.
Non-covered assets include: any crypto bought on Coinbase before January 1, 2026; crypto transferred into Coinbase from Coinbase Wallet; crypto sent from other exchanges (Kraken, Binance, Gemini, etc.) — and crypto from hardware wallets like Ledger or Trezor.
2. The Per-Wallet Tracking Requirement
Starting with 2025 transactions, the IRS moved from a universal-pool approach to a per-wallet, per-account tracking requirement. Beginning in 2025, basis and tax-lot selection must be applied wallet-by-wallet (or account-by-account). Each wallet becomes its own cost-basis ledger and lots cannot be mixed across wallets.
Practically: if you hold ETH on both Coinbase and Kraken, you can’t average the basis across both accounts. If you sell 1 ETH on Coinbase for $3,500, you must use the Coinbase cost basis, not a Kraken basis. Your gain is calculated from what you paid on Coinbase specifically.
This catches people who mentally tracked their crypto as one big pool. It’s now two (or twenty) separate ledgers.
3. The Wrong Accounting Method
You can update your entity’s cost basis method setting (HIFO, FIFO, LIFO) at any point for future transactions, if you haven’t already. By default, it will be set to FIFO.
FIFO isn’t wrong — but for many crypto holders who’ve been accumulating since 2017, FIFO means you’re selling your oldest (and often lowest-cost) units first, which typically produces the largest gains. If you never updated this setting, every disposal on Coinbase used FIFO.
Starting January 1, 2025, the only accepted cost basis methods for digital assets are First-In-First-Out (FIFO) and Specific Identification, which includes methods like Highest-In-First-Out (HIFO) and Last-In-First-Out (LIFO). For Specific Identification, you must identify the asset(s) at or before the time of the sale — you can no longer apply it retroactively.
If you wanted HIFO for 2025 trades, that election had to happen before or at the time of each sale. Retroactive elections are gone.
4. Crypto-to-Crypto Swaps
Crypto-to-crypto exchanges — like exchanging Bitcoin for Ethereum — are included in the 1099-DA reporting. Each swap is a taxable disposal. If you swapped BTC for ETH on Coinbase in 2025, that’s a sale of BTC at fair market value, triggering a gain or loss on the BTC side.
Many users forget this. They see the BTC-to-ETH transaction, think “I didn’t sell anything for cash,” and miss the entire gain. The 1099-DA will include the proceeds from that swap. You need the basis for the BTC you gave up.
5. Stablecoins
Stablecoins are designed to maintain a stable value, but the IRS treats these assets as property, not cash. That means swapping USDC for BTC is a taxable event on the USDC side, and if your USDC cost basis isn’t exactly $1.00 (because you received it as yield, or during a brief depeg), you may have a small gain or loss to report.
If the total designated sales of qualifying stablecoins are $10,000 or less for the year, the broker is not required to include those sales on a Form 1099-DA. Beyond this minimum, brokers have discretion regarding the level of transaction detail they provide to the IRS.
6. Zero-Basis Defaults
If you cannot substantiate your wallet-by-wallet basis, the IRS may disregard your claimed basis entirely and treat the sale as having zero cost basis. This is the nightmare scenario: Coinbase reports $50,000 in proceeds, you have no basis records, and the IRS treats all $50,000 as a taxable gain. The fix isn’t to guess — it’s to reconstruct.
How to Fix Missing Cost Basis
Missing basis on a Coinbase 1099-DA is fixable. It requires records, patience, and sometimes help from someone who’s done it before. Here’s the framework:
Step 1: Pull Your Full Coinbase Transaction History
Download your complete transaction history from Coinbase — not just the 1099-DA. This includes all purchases, transfers in, transfers out, conversions, and earn rewards. Coinbase’s transaction export gives you the raw data you need to build your basis ledger.
Step 2: Reconstruct the Transfer Chain
For every asset that was transferred into Coinbase from another platform, you need to trace it back to its original purchase. That means pulling records from the originating exchange. You may want to keep your own records to track and report your cost basis information from other accounts and wallets so that you can accurately file your income tax return.
If cost basis data is missing, you’ll need to reconstruct it using your purchase records, acquisition dates, and transfer history.
Step 3: Apply the Correct Accounting Method
Decide on FIFO or Specific Identification — and make sure it’s applied consistently, wallet by wallet. The statements reflecting information on Form 1099-DA will not provide the basis of the taxpayers’ digital asset transactions for the 2025 tax year. Basis must be calculated by taxpayers before their 2025 tax return can be filed.
Step 4: Report Correctly on Form 8949
On Form 1099-DA, the sale proceeds will be reported, but the cost basis section may show as “non-covered.” You are solely responsible for tracking, calculating, and reporting the correct cost basis on your tax return.
For noncovered transactions, check Box E on Form 8949 (proceeds reported to IRS, basis not reported). Fill in your reconstructed basis in Column E. The difference is your gain or loss.
Regardless of whether you receive a Form 1099-DA, you are responsible for reporting any taxable gains or losses on your personal income tax return (Form 8949 and Schedule D).
Step 5: Don’t Amend Your 1099-DA for Its Own Sake
Coinbase has confirmed that if you’re filing with Form 8949, you do not need to edit your 1099-DA. Coinbase will not report cost basis to the IRS in 2025, regardless of whether you amend your 1099-DA or not. Your corrections belong on your tax return — not on the 1099-DA itself.
1099-DA Guides for Other Exchanges
Coinbase isn’t the only exchange with 1099-DA complexity. If you traded on multiple platforms, you’ll need to reconcile each one separately. See our exchange-specific 1099-DA guides for:
Each exchange has its own quirks — different export formats, different default accounting methods, different approaches to staking income. Handle each one on its own terms.
FAQ: Coinbase 1099-DA
Q: My Coinbase 1099-DA shows $200,000 in proceeds. Do I owe tax on all of it?
No. Proceeds are the total value you received from disposals — not your profit. You subtract your cost basis from proceeds to get your gain or loss. If you paid $195,000 for the assets you sold, your taxable gain is $5,000, not $200,000. The 1099-DA doesn’t know what you paid. That’s your job.
Q: Why does my 1099-DA say “noncovered” for everything?
This applies to any crypto asset that was acquired on Coinbase before January 1, 2026. Since we’re still in the first year of 1099-DA reporting (tax year 2025), virtually all 2025 disposals involve assets acquired before 2026 — meaning all of them are noncovered. Beginning tax year 2026, Form 1099-DA will also include cost basis information for certain crypto assets qualifying as “covered” assets.
Q: I transferred ETH from Ledger to Coinbase and then sold it. What’s my cost basis?
Your cost basis is what you originally paid for the ETH — wherever you bought it. Coinbase has no record of that purchase. You need to pull your original transaction records from whatever platform or wallet you used to acquire it, then apply that basis to the sale on Coinbase. Per-wallet tracking rules mean you use the basis of the lot that actually moved to Coinbase.
Q: Can I use HIFO to lower my taxable gain on Coinbase sales?
HIFO (Highest-In, First-Out) sells your highest-cost units first and is a tax optimization strategy implemented through Specific Identification. You can use it — but the election must have been made at or before the time of each sale, not retroactively. You can update your cost basis method setting on Coinbase (HIFO, FIFO, LIFO) at any point for future transactions. For past 2025 trades where you didn’t make a timely election, FIFO likely applies by default.
Q: I got a 1099-DA from Coinbase but also traded on Kraken and used a MetaMask wallet. How do I handle all of it?
Each platform and wallet is a separate cost basis ledger. Your Coinbase 1099-DA covers only Coinbase disposals. Your Kraken activity will generate its own 1099-DA. Your MetaMask activity — self-custody DeFi — is not covered by any 1099-DA and must be reconstructed from on-chain data. You need all three handled consistently and filed together on a single Form 8949 and Schedule D. This is exactly where a multi-platform reconstruction becomes critical.
Q: What happens if I just file using the 1099-DA proceeds and don’t report cost basis?
Capital gains taxes are calculated by subtracting an asset’s cost basis from its sale proceeds. Without the basis figure, the IRS sees only the gross proceeds. Filing without basis effectively treats every dollar of proceeds as a taxable gain. You’ll overpay — potentially by an enormous margin — and the IRS has no mechanism to fix that for you automatically. You have to supply the basis.
Q: Does Coinbase report my staking income separately?
You may also receive Form 1099-MISC if you earned more than $600 in crypto income such as staking rewards. Staking income is reported on 1099-MISC, not 1099-DA. The 1099-DA covers disposals. When you eventually sell those staking rewards, the cost basis for those units is typically their fair market value at the time you received them. Track that date and value when the rewards hit your account.
The Bottom Line
Your Coinbase 1099-DA is a proceeds document. It tells the IRS — and you — how much you received from selling or exchanging crypto. It does not, for 2025, tell the IRS what you paid. That gap is entirely your responsibility to fill before you file.
For users who only ever bought and sold within Coinbase, with clean records and a consistent accounting method, this is manageable. For anyone who transferred assets across platforms, used DeFi, received airdrops, or accumulated through multiple years and wallets — the reconstruction is more involved.
If your records are incomplete, we can help. We work through multi-platform transaction histories, reconstruct cost basis from on-chain data and exchange exports, and produce a return that matches what the IRS has on file — with the basis documented to back it up.
This post is general educational information, not tax advice. Your situation may differ based on your specific transaction history, accounting method elections, and applicable IRS guidance. Consult a tax professional before filing.
Need help with your crypto taxes? Mike Ring and the BCTP team handle the messy stuff — multi-chain DeFi, 1099-DAs that don’t add up, prior-year amendments. Free consult at cryptotaxprep.io or call 410-216-4632.
This isn’t tax advice. Talk to a professional about your specific situation.
