5 Common Form 1099-DA Mistakes in 2026 — And How to Fix Them

A Form 1099-DA is the broker statement for digital asset sales and certain other dispositions, new for US taxpayers and the 2025 tax year. Your broker sends it to you and to the IRS. It is meant to augment your own records, not serve as the sole source of truth.

Here are five common 1099-DA mistakes you can make when filing your crypto taxes, and what to do to avoid them.

This is the big one. For 2025 transactions, brokers have sent proceeds on Form 1099-DA. Many do not report basis and won’t until the 2026 tax year.

The IRS says taxpayers still have to calculate cost basis before filing. That is why missing cost basis crypto is the most common problem on these forms. Here’s why it happens:

• You bought on one exchange and sold on another

• You moved coins through a hardware wallet

• Your broker saw the sale, but not the original buy

• Box 1g may be blank, and some broker statements may label basis as unknown

Example

• You buy BTC on Kraken for $30,000.

• You move it to a hardware wallet.

• You sell it on Coinbase for $95,000.

Without records, the IRS-facing form can make it look like you have a $95,000 gain. In reality, the gain is $65,000.

Here’s how to fix it:

• Rebuild your cost basis

• Pull records from every crypto wallet and exchange

• Report the real numbers on Form 8949

• If this started with transferred crypto, make sure the buy history came over too

You usually do not need a corrected 1099-DA for this. Missing basis is something you fix on the return, not by forcing the broker to know what it never knew.

Here’s a simple example of incorrect proceeds (and how to handle them).

Example

• Your records show you sold ETH for $3,450.

• Your 1099-DA shows $3,438.

That $12 gap is usually not a crisis. It can come from timing or valuation differences. In a small mismatch like this, most taxpayers simply use the broker’s proceeds figure on Form 1099-DA and focus on getting basis right, because that is the figure the IRS already received from the broker.

When it becomes a real problem:

• Your records show $3,450, and the form shows $34,380

• A sale appears twice

• A purchase is shown as a sale

• The quantity is obviously wrong

That is a real 1099-DA incorrect proceeds issue. Here’s what to do:

• Contact the issuer

• Ask for a corrected form

• Keep the ticket number and all messages

• Do not wait forever to file

Short version: trust the form more for proceeds than for basis. Basis is where the real trouble usually is.

This one throws people off. A wallet-to-wallet transfer is usually not taxable by itself. But the fee can matter.

The IRS says digital asset transaction costs can affect gains or losses, and broker guidance allows reporting of digital asset transactions used to pay broker fees. In plain English, a fee paid in crypto can create a small disposal entry.

That means these entries are often correct, not errors. Here’s what to do:

• Include the fee-related piece in your tax calculations

• Keep transfer records so you can tell a transfer from a sale

• Expect the tax impact to be small in many cases

• If the whole transfer shows as a sale, contact the exchange

Sometimes the form is not wrong. The method is. The IRS rule is simple. If you can adequately identify the exact units sold, you can use specific identification. If you cannot, FIFO is the fallback.

This table shows the practical difference between crypto accounting methods.

A few rules matter more than the acronyms:

• If you cannot adequately identify units, FIFO is the default

• HIFO and LIFO only work if your records support them

• You need one defensible method and clean records

• Sloppy switching is one of the easiest crypto tax mistakes to make

This is rare. But it is serious.

We are talking about things like:

• Purchases showing up as sales

• Transactions you never made

• Duplicate sales

• Impossible quantities

• Proceeds that are off by a mile

If that happens, act fast. Here’s what to do:

1. Contact exchange support and request a corrected 1099-DA

2. Document every interaction

3. Do not ignore it

4. Rebuild your actual tax result from all wallets and exchanges

5. You might file an extension if you need additional time

6. File Form 8949 with the right numbers, not the bad ones

A short explanation statement can also help if the mismatch is big. Showing a good-faith effort matters if the IRS later follows up, and you face a crypto tax audit.

Yes. But only when a correction actually makes sense. You should usually ask for a corrected form if:

• The proceeds are materially wrong

• A purchase is listed as a sale

• A transaction you never made appears on the form

• A sale is duplicated

• The quantities are clearly wrong

You usually do not need a corrected form for:

• Missing basis

• A blank box 1g

• Small proceeds differences

• Transfer-fee entries that are actually correct

How to request one:

1. Contact the exchange’s tax support

2. Describe the exact transaction that is wrong

3. Send dates, quantities, and transaction IDs

4. Keep everything in writing

5. If the deadline is approaching, file an extension while you wait

You cannot prevent every bad form. You can make the cleanup much easier.

Do this before filing:

• Save exchange exports

• Save wallet records

• Label transfers clearly

• Keep purchase history, not just sale history

• Reconcile your form against your own records

• Decide on a defensible accounting method before you file

If you traded across several platforms, this matters even more. A broker may know what you sold. It may not know what you paid.

That is where TokenTax helps. Instead of trusting a single incomplete broker feed, you can import your full history and reconstruct cost basis for crypto across exchanges and wallets. When in doubt, consult one of our crypto tax experts.

A few things can happen. None is good. You can:

• Overpay because your crypto cost basis was missing

• Underreport because you trusted a bad number

• Trigger a mismatch because the IRS got different proceeds from the broker

• Get a follow-up notice

• Owe extra tax, interest, and maybe penalties if the return understated tax