5 Common Form 1099-DA Mistakes 2026

1. Missing cost basis

The most common issue that crypto investors face is missing/inaccurate cost basis. Typically, cost basis data errors happen if you transferred crypto in/out of your exchange. 

In this case, you should have $65,000 of capital gain. However, if you have no records of your original purchase, you’ll need to report $95,000 of capital gain. 

Why this happens: For the 2025 tax year, exchanges are not required to track and report cost basis data to the IRS. In situations like these, your exchange has no record of your cost basis because the original purchase took place outside of their platform. 

How to fix it: Luckily, fixing cost basis is simple. There’s no need to request a corrected Form 1099-DA in cases like this. 

Under current IRS rules, you can simply report your correct cost basis for your transaction on Form 8949, provided that you have records to back it up. Account for transactions from every exchange and wallet where you've traded crypto. You can find your cost basis manually, or use crypto tax software to import your activity from cryptocurrency platforms and generate a complete tax report in minutes. 

2. Incorrect proceeds

The proceeds numbers on Form 1099-DA may be different from your own records. 

Your records may show that you sold ETH for $3,450, but your form shows $3,438.

Why this happens: Price differences usually happen due to different cryptocurrency price sources. Your exchange may use a different price oracle than your crypto tax software. 

What to do: Use the proceeds numbers from your Form 1099-DA when reporting your taxes. Remember, this is what your exchange reports to the IRS. While it’s unlikely that a minor difference will lead to issues, matching the proceeds numbers on Form 1099-DA exactly is the best way to avoid further scrutiny. 

In a case where there’s a major discrepancy between your proceeds and your records, you should request a corrected Form 1099-DA (more on this later). 

3. Transfers showing up on the form

You may see transfers to other wallets you own listed on your 1099-DA as disposals. While this may appear to be an error at first glance, it’s possible that these transactions are reported accurately. 

Why transfers appear: When you transfer crypto between wallets, you pay network fees. Spending crypto on transfer fees is considered a disposal subject to capital gains tax. 

What you need to know: In most cases, these entries are correct. Include them in your tax calculations. Because fees are usually at most a few dollars, the tax impact should be minimal. 

4. Wrong calculation method

If your Form 1099-DA uses one accounting method and you use another, you may end up with completely different tax calculations. 

Why this matters: The IRS allows several accounting methods for crypto. These accounting methods determine the ‘order’ in which your cryptocurrency is sold. These include: 

• FIFO (First In, First Out)
• LIFO (Last In, First Out)
• HIFO (Highest In, First Out)

Most exchanges use FIFO by default. 

Remember, different accounting methods can lead to vastly different tax calculations. 

How to handle it: Pick one method and stick with it consistently. If the proceeds on your Form 1099-DA were calculated with FIFO, you should use the same method when reporting your taxes.

5. The form is completely wrong

 In some cases, your 1099-DA may show purchases as sales or include transactions you never made. While this problem is rare, it does require serious action. 

What to do:

Contact your exchange’s support: Request a corrected 1099-DA and document your attempts to resolve the issue. This shows a good-faith effort if the IRS contacts you about any discrepancies. 

Don't ignore it: Calculate your actual tax liability using complete records from all of your wallets and exchanges. 

Consider filing an extension: Consider filing for an extension. This gives you more time to get a corrected form.

File with accurate information: Report your corrected figures on Form 8949. You can attach a brief explanation noting the error and the steps you took to fix it.

How to avoid Form 1099-DA problems

The best way to handle 1099-DA issues is by being proactive and keeping complete records of your gains and losses. 

Track everything: Keep records of every crypto transaction across all your exchanges and wallets. Don't rely on a single Form 1099-DA.

Use crypto tax software: Crypto tax software is the easiest way to keep track of your gains, losses, and income across all of your exchanges. Platforms like CoinLedger import transactions from Coinbase and hundreds of other exchanges automatically. 

Double-check before filing: Compare your 1099-DA against your complete transaction history. Look for missing cost basis, confirm proceeds match, and verify all transfers are accounted for.

What happens if you file incorrectly?

Cryptocurrency exchanges send your 1099-DA to the IRS. If there's a major difference in the proceeds numbers you report on your tax return, you might receive a warning letter.

If you receive a notice, you should reach out to a tax professional and make sure you have accurate records of all of your crypto transactions. Provide your complete Form 8949 showing all taxable activity and explain how you calculated your figures using records from all platforms.

Get your crypto taxes right

CoinLedger makes filing your crypto taxes easy. You can connect over 800 exchanges, blockchains, and wallets. The platform automatically calculates your gains and losses and generates tax forms like 8949 in minutes.

More than 700,000 crypto investors use CoinLedger to handle their taxes. 

Get started with a free account today.