The first Form 1099-DA statements landed in spring 2026, and they report one number to the IRS: gross proceeds. Not gain. Not basis. For any business that accepted crypto as payment, held it, and later converted it to dollars, that gap is now the taxpayer’s problem to document — and the window to keep clean 2026 records closes December 31.
What happened
Form 1099-DA covers reportable sales and exchanges of covered digital assets through U.S. brokers, starting with transactions on or after January 1, 2025. It mirrors how Form 1099-B works for securities.
The phase-in matters. As 24/7 Wall St. summarized:
- 2025 transactions: gross proceeds only. No cost basis reported.
- 2026 transactions: cost basis reporting begins phasing in for certain covered digital assets, on forms arriving in early 2027.
Significant activity stays outside the form entirely: foreign exchanges, on-chain swaps through decentralized protocols, self-custodied activity, and staking, mining, airdrops, and hard forks — which appear on a 1099-MISC or 1099-NEC, if anywhere.
Why it matters
The IRS now has a proceeds figure it can match against your return. You have the burden of showing what you paid.
The failure mode isn’t underpayment — it’s overpayment plus a notice. Copy the proceeds number onto the return as income and you’ll overstate the gain, sometimes badly. Omit a transaction because the exchange was foreign or non-custodial, and you get an underreporting mismatch instead. The reconciliation happens on Form 8949, and it only works if your records exist.
What this means for small business owners
If your business touches crypto at all, several things belong on the close checklist before year end:
Record the dollar value at receipt. Crypto taken as payment is ordinary revenue at fair market value on the date received — and that value becomes your basis. If your books post the deposit only when it converts to dollars, the revenue date and the basis are both wrong.
Treat every conversion as a disposal. Selling crypto for dollars, swapping one token for another, or paying a vendor in crypto are all taxable events with a gain or loss against basis. Bookkeeping that treats a conversion as a simple transfer between accounts will silently drop that gain.
Don’t rely on the exchange to remember. Broker records for 2025 don’t carry basis, transfers between your own wallets can surface as apparent sales, and platforms that close or get acquired take their export history with them. Pull and archive your own transaction history now, not in March.
Reconcile 1099-DA to your ledger line by line. The proceeds total on the form should tie to disposals in your books. Where it doesn’t, find out why before the return is filed.
The bottom line
The reporting regime is arriving in stages — proceeds now, basis for 2026 transactions on forms issued in 2027 — and the interim is where the mismatches live. For businesses accepting digital assets, the work is ordinary bookkeeping: value revenue on the day it’s received, treat conversions as disposals, and keep the export. Do it before December 31 and next spring is reconciliation. Do it after, and it’s reconstruction.
