You opened your Kraken Tax Center, downloaded your 1099-DA, and stared at a number that made you want to close the browser and move to a country without income tax. That number is your gross proceeds. Not your gain. Not your profit. Just the raw total of what you received from every disposal — no deductions, no cost basis, no context.
That’s how Kraken’s 1099-DA was designed to work for 2025. And if you file your return using that number without supplying your own cost basis, you’re almost certainly overpaying tax. Possibly by a lot.
This guide breaks down what Kraken actually reports on Form 1099-DA, where the cost basis gaps come from, Kraken-specific gotchas you should know before you touch Form 8949, and how to clean up a $0 or missing basis situation. We also link to our guides for other exchanges if you’re juggling multiple platforms.
What Is Form 1099-DA, and Why Does Kraken Send It?
Form 1099-DA, officially titled “Digital Asset Proceeds From Broker Transactions,” is used by brokers to report proceeds from (and in some cases, basis for) digital asset dispositions to you and the IRS. It’s the crypto-native equivalent of the 1099-B you’d get from a stock brokerage — except it was built specifically for digital assets.
Starting with the 2025 tax year, the IRS requires digital asset brokers to send this form to investors who have engaged in certain transactions involving digital assets, such as cryptocurrency and NFTs. For Kraken users, that means any sale, crypto-to-crypto trade, or other disposal executed on Kraken.com, Kraken Pro, or their related apps triggers 1099-DA reporting.
Whether or not you receive a Form 1099-DA, you must report all income, gains and losses from digital asset transactions on your federal income tax return. The form doesn’t change your obligation — it just means the IRS now has the same data you do.
The IRS’s official resource for the form is at irs.gov/Form1099DA, and it’s worth bookmarking.
What Kraken’s 1099-DA Actually Contains
Here’s a field-by-field breakdown of what you’ll see on your Kraken 1099-DA for the 2025 tax year.
Gross Proceeds (Box 1f)
Consistent with IRS guidance, only gross proceeds are reported on your Form 1099-DA, and accordingly, gross proceeds on Form 1099-DA are not your gain or loss. This is the most important sentence in Kraken’s own documentation. Your 1099-DA is not a profit statement. It’s a disposition statement.
Asset Identification (Boxes 1a–1b)
Each line on the form identifies the specific digital asset — its Digital Token Identifier Foundation (DTIF) code and name. So yes, your DOGE, your BTC, and your wrapped ETH are listed separately.
Acquisition and Disposition Dates (Boxes 1d and 1e)
Box 1d shows the original date the assets were acquired. This box may be blank if the digital assets sold were acquired on a variety of dates or if the date is unknown. Box 1e shows the sale or disposition date. Blank acquisition dates are not a glitch — they’re expected when Kraken doesn’t know your purchase date (more on that below).
Cost Basis and Gain/Loss (Box 1g)
For 2025, Kraken did not report your cost basis to the IRS on Form 1099-DA. The gain/loss information and FIFO-calculated basis that may appear in your Tax Center dashboard are for your convenience only. For the 2025 tax year, Kraken reports gross proceeds to the IRS. FIFO-based gain and loss calculations are provided for your convenience but are not reported to the IRS.
If Box 1g on your form says “unknown” or is blank, that’s by design — not an error you need to ask Kraken support to correct.
Covered vs. Noncovered Status (Box 9)
This is the checkbox most people skip and later regret. Every digital asset acquired before January 1, 2026 is permanently noncovered. This means the broker will never report its cost basis to the IRS, even in future years. For 2025, everything is effectively noncovered. That matters for how you complete Form 8949 — specifically which checkbox you mark in Part I or Part II.
Stablecoin and NFT Aggregation
Your statement may include an aggregate summary for qualifying stablecoins or certain NFTs. These amounts are already included in your digital asset reporting. Under IRS rules, qualifying stablecoins (those pegged to fiat, like USDC or USDT) are subject to a $10,000 annual de minimis threshold. If your total stablecoin transactions stay below this amount, brokers won’t report them. For amounts above $10,000, brokers report aggregate totals rather than listing every individual transaction. NFTs have a separate $600 threshold.
What 1099-DA Does NOT Cover
The Form 1099-DA initially covers only sales from activity on the Kraken Exchange, including Kraken.com, Kraken Pro, and the related apps. Activity on DeFi apps (Kraken Wallet and Ink) may be reportable in future years. Additionally, Kraken may issue Form 1099-B if you traded regulated futures or options contracts. Futures contracts may be treated as Section 1256 contracts under IRS rules, with a 60/40 split between long-term and short-term gains regardless of holding period. Check for a separate 1099-B if you traded Kraken Futures.
Staking rewards and referral income are reported on a separate 1099-MISC, not the 1099-DA. If your total rewards (including staking rewards, airdrops, referral rewards, and deposit bonuses) are less than $600 for the tax year, Kraken did not report this income to the IRS on Form 1099-MISC — but you still owe tax on it.
Kraken-Specific Gotchas
Gotcha #1: FIFO Is Displayed, But It Doesn’t Control Your Filing
For the 2025 tax year, Kraken used the FIFO (First-In, First-Out) method solely to calculate and display cost basis and estimated gains or losses in the statement. This is informational. For 2025, Kraken was not required to report your cost basis and gains/losses to the IRS, and you may calculate gains/losses using IRS-permitted identification rules. If HIFO or Specific ID is more favorable for your situation, you can use it — but you must document it, and you must have elected your method per-account under the wallet-by-wallet rules that took effect January 1, 2025.
Gotcha #2: Transferred-In Assets Show $0 or “Unknown” Basis
This is the most common source of pain. When your Kraken 1099-DA shows $0.00 cost basis for every transaction because all crypto was transferred in from other platforms, the IRS assumes you made pure profit on every sale, dramatically overstating your tax liability.
Kraken has no way to see what you paid for an asset on Coinbase, or in a hardware wallet, or on a DEX. Kraken cannot see transactions on other platforms, so it’s your responsibility to track your gains/losses across all of your wallets and exchanges. You need records from the originating platform — purchase confirmations, exchange CSVs, on-chain transaction data — to establish the correct basis.
Gotcha #3: Crypto-to-Crypto Trades Are All Reportable
You didn’t sell for USD. You still got a 1099-DA. Crypto-to-crypto trades can be reportable dispositions (and may be taxable), because exchanging one digital asset for another is treated as a disposition of property. If you were spinning through BTC/ETH pairs or rotating into stablecoins during a volatile stretch, every one of those swaps was a taxable event that shows up on your form.
Gotcha #4: Wallet-by-Wallet Tracking Is Now the Law
Starting January 1, 2025, you must track cost basis separately for each exchange account and each wallet. Universal (cross-wallet) pooling is no longer permitted. If you were running a pooled HIFO strategy across Kraken, Coinbase, and your Ledger in prior years, that approach is gone. A method elected on Coinbase does NOT carry over to Kraken. Transferring crypto between your own accounts creates “noncovered” status on the receiving side — the receiving broker has no visibility into your original purchase price or date.
Gotcha #5: No Document ID on the Form
For the 2025 tax year, Kraken does not provide a Document ID on Form 1099 packages. This is expected and does not impact the validity of your form or your ability to file your taxes. If your tax software asks for a Document ID, use Kraken’s CSV export or API import instead.
How to Fix Missing or $0 Cost Basis
Your 1099-DA shows $180k in proceeds. Your actual gain might be $40k. Here’s the process to get from one to the other without setting off IRS matching alarms.
Step 1: Gather everything Kraken can give you.
Download your full transaction history CSV from the Kraken Tax Center. This is more granular than the 1099-DA and is what our multi-chain transaction processor ingests to begin reconstruction. The gains/losses report separates short-term and long-term gains and losses and includes cost basis and proceeds for each disposal. This report may help when preparing Schedule D and Form 8949.
Step 2: Trace transferred-in assets back to their origin.
For every asset that came into Kraken from an external wallet or exchange, you need the original purchase record. If you bought Bitcoin on Coinbase for $35,000 in 2023, transferred it to a hardware wallet, then to Kraken in 2024, and sold it on Kraken in 2025 for $92,000 — Kraken’s form shows $92,000 in proceeds and blank basis. You need the Coinbase record showing the $35,000 purchase to claim the correct $57,000 gain. Without it, the IRS sees a $92,000 gain instead of your actual $57,000 gain. Without documentation proving your original purchase, you’ll pay taxes on an extra $35,000 that wasn’t profit.
Step 3: Reconstruct from on-chain data where records are missing.
If you’ve lost access to older exchange accounts, block explorers can surface transaction hashes, timestamps, and wallet addresses. It’s tedious, but it’s evidence. Fair market value at date of acquisition (sourced from a reputable price history database) establishes your basis when receipts are gone.
Step 4: File Form 8949 with corrected numbers.
Use the gross proceeds as reported and supply your own corrected cost basis on Form 8949. When completing Form 8949, select the checkbox indicating whether cost basis was or was not reported to the IRS. For most Kraken transactions in the 2025 tax year, cost basis was not reported under current IRS rules. That means you’re working in Part I or Part II with the “B” or “E” checkbox (covered/noncovered, no basis reported), and you’re entering your reconstructed basis in column (e).
Step 5: Keep your documentation.
Keep your exchange CSV, transaction records, and reconciliation workpapers as documentation in case of IRS inquiry. The 1099-DA matching process will flag discrepancies between what Kraken reported and what you filed. You want a paper trail that explains every difference.
For a deeper look at the missing-basis problem and how reconstruction actually works across exchanges, see our pillar guide: 1099-DA Missing Cost Basis: The Complete Fix. If you want us to handle the reconstruction work directly, see our 1099-DA Missing Cost Basis solution page.
How Kraken Compares to Other Exchanges
Kraken’s 1099-DA approach is broadly consistent with other major custodial platforms, but the details differ. We’ve covered each exchange in depth in our Insights hub:
- Coinbase 1099-DA — Similar gross-proceeds-only approach, but Coinbase’s tax center has deeper integration for cost basis matching.
- Gemini 1099-DA — Gemini uses a per-asset, per-lot reporting style that surfaces differently in tax software imports.
- Robinhood 1099-DA — Robinhood users often have cleaner cost basis for assets bought on-platform but face the same transfer-in gaps as everyone else.
- Crypto.com 1099-DA — Complex reward structures (CRO staking, Visa card cashback) generate additional 1099-MISC income that intersects with your 1099-DA basis.
- Binance.US 1099-DA — Binance.US has had CSV export reliability issues that complicate reconstruction; verify your transaction history manually.
Each guide walks through what that specific exchange reports, what it doesn’t, and how to reconcile the gaps.
FAQ
1. Does my Kraken 1099-DA show my taxable gain?
No. Under current IRS rules for the 2025 tax year, Kraken is only required to report gross proceeds from your sales. Cost basis reporting is not required until the 2026 tax year, and under current guidance applies only to assets acquired in 2026 or later. Gross proceeds are not your gain. They are the total amount you received before accounting for what you originally paid. If you file based on those numbers without supplying your own cost basis, you will almost certainly overpay tax.
2. Kraken’s Tax Center shows FIFO gains. Should I use those numbers?
For the 2025 tax year, Kraken used the FIFO method solely to calculate and display cost basis and estimated gains or losses in the statement. If the cost basis, gain/loss, or other holding period information does not match your records, you may use your records because this information was not reported to the IRS. The FIFO estimates are a starting point, not a binding election. If HIFO or Specific ID produces a more accurate or favorable result, use that — with proper documentation.
3. I only traded crypto-to-crypto on Kraken. Why do I have a 1099-DA?
Crypto-to-crypto trades can be reportable dispositions (and may be taxable), because exchanging one digital asset for another is treated as a disposition of property. Every BTC→ETH swap, ETH→USDC trade, or altcoin rotation is a taxable event that generates proceeds. If those disposals happened on Kraken, they appear on your 1099-DA.
4. My 1099-DA shows cost basis as “unknown” for half my positions. Is that an error?
Probably not. If you transferred assets into Kraken from external wallets or platforms, some acquisition data may appear as missing or “unknown.” Kraken has no visibility into what you originally paid on another platform. The fix is to supply your own records — purchase receipts, CSV exports from the originating exchange, or on-chain data — and enter the corrected basis on Form 8949.
5. Do I need to file Form 8949 even if I got a 1099-DA?
Yes. Form 1099-DA is an informational form. Even if you receive it, you are still required to report your capital gains and losses on Form 8949. The 1099-DA tells the IRS you transacted; Form 8949 is where you show whether those transactions resulted in gains, losses, or both. Schedule D then summarizes the 8949 output.
6. What happens if the IRS sees different numbers on my 1099-DA versus my return?
The IRS will run automated matching between what Kraken reported and what appears on your return. If your reported proceeds are lower, or if your gains appear significantly reduced from the gross proceeds figure, that’s a potential CP2000 notice trigger. The solution isn’t to match the wrong number — it’s to attach a clear Form 8949 showing the gross proceeds, your corrected cost basis, and the net gain or loss. The compliance risk is not “forgetting crypto” — it’s mismatches created when the broker form is partial, your basis is missing, or your on-chain activity sits outside what the broker can see.
7. Will Kraken report cost basis to the IRS in future years?
For the 2025 tax year, brokers report gross proceeds only. Starting with transactions made on or after January 1, 2026, brokers must also report cost basis for covered digital assets — those acquired and held within the same broker account. That means assets you buy on Kraken in 2026 and later will eventually have basis reported. Assets acquired before 2026, or transferred in from other platforms, remain permanently noncovered — you’ll always be responsible for supplying that basis yourself.
The Bottom Line
Your Kraken 1099-DA is not a tax bill. It’s a starting point. The gross proceeds figure is real, the IRS has a copy, and it will be matched against your return. What that number means for your actual tax liability depends entirely on cost basis your Kraken account may have no record of.
If your history spans multiple exchanges, wallets, or years — or if you transferred crypto into Kraken from anywhere — the reconstruction work is non-trivial. It’s not impossible, but it requires full transaction history, fair-market-value documentation, and careful Form 8949 preparation.
For a full breakdown of the missing-cost-basis problem across all exchanges, start with our 1099-DA Missing Cost Basis guide. If you want someone to handle the reconstruction and filing for you, we can help.
This post is educational and reflects general guidance for the 2025 tax year. It is not tax advice. Your situation may differ — consult a qualified tax professional before filing, especially if your history involves multi-platform transfers, DeFi activity, or significant unreported prior-year transactions.
— Mike Ring, Blockchain Crypto Tax Prep
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.
