Last updated: October 19, 2026 · Applies to the 2026 tax year (returns filed in 2027)
You open your Form 1099-DA and the cost basis column (box 1g) is blank, or it shows a number that is clearly wrong. This is common, and it does not mean you owe tax on the full sale price. It means the broker did not have, or was not required to report, what you paid. Your job is to supply the correct basis on Form 8949, and this guide shows exactly how.
Key takeaways
- Missing basis is normal for crypto bought before 2026 or transferred in from another wallet or exchange.
- Never report a blank basis as zero: you would pay tax on money that was originally yours.
- Report sales with missing basis on Form 8949 box H (short-term) or box K (long-term) and enter your own basis.
- If the broker reported a basis that is wrong, use box G or J with adjustment code B.
- Keep the records that prove your basis: purchase confirmations, exchange exports and transfer histories.
Why your 1099-DA has no cost basis
Brokers only have to report basis for covered digital assets: those acquired after 2025 in an account at that broker and kept there until sale. Basis is usually missing in these situations:
| Situation | Why basis is missing | Where your real basis is |
|---|---|---|
| You bought the coins before 2026 | They are noncovered; reporting basis is optional for the broker | Your purchase history at that exchange |
| You transferred the coins in from another exchange | The receiving broker does not know what you paid | The exchange where you originally bought them |
| You transferred them in from a self-custody wallet | Same: the broker sees only the deposit | Wherever you acquired them before moving them to the wallet |
| You received them as income (staking, airdrop, payment) | Basis is their value when you received them, which the broker may not track | Your income records for that year |
Box 9 on the 1099-DA is checked when the asset is noncovered, and boxes 12a and 12b show units transferred into the account and when. Both are clues to which of these situations applies. For a full explanation of every box, see Form 1099-DA explained.
What happens if you leave the basis at zero
The IRS receives the proceeds from your 1099-DA. If you report the sale with no basis, the entire sale price is treated as gain. On a $10,000 sale of coins you paid $8,000 for, you would report a $10,000 gain instead of $2,000, and in the 22% bracket that is roughly $1,760 of tax you did not owe. Supplying the correct basis is not a loophole; it is what the form expects you to do.
Step 1: Find your original purchase records
Start with the platform where you first bought the coins and work forward:
- Exchange exports. Download the full transaction history (CSV) from every exchange you have used, including old accounts you no longer use.
- Bank and card statements. They show the dollar amounts you sent to exchanges and the dates.
- Email confirmations. Search your inbox for “order filled”, “purchase confirmation” or the exchange’s name.
- Blockchain records. For self-custody wallets, a block explorer shows when coins arrived and from which address, which helps you trace them back to the purchase.
If an exchange has shut down, look for exports you saved, emails, and bank records of deposits. Reconstruct basis as carefully as you can and document how you did it: if you cannot support the basis you claim, the IRS can treat it as zero.
Step 2: Match the lots, wallet by wallet
Since January 1, 2025, cost basis is tracked separately for each wallet or account. When you sell from an account, the lots you sold come from that account, normally oldest first (FIFO) unless you specifically identified other lots at the time of sale.
When coins move between your own accounts, their original basis and purchase date travel with them. A transfer is not a sale, so it does not reset your holding period. Crypto tax software is the practical way to follow coins across many accounts: it imports every exchange and wallet, matches the outgoing and incoming side of each transfer, and carries the basis forward.
Step 3: Pick the right Form 8949 box
| What your 1099-DA shows | Short-term | Long-term | What to enter |
|---|---|---|---|
| No basis, or basis not reported to the IRS | Box H | Box K | Your correct basis in column (e); no adjustment needed |
| Basis reported to the IRS, but wrong | Box G | Box J | The reported basis in column (e), code B in column (f) and the correction in column (g) |
| No 1099-DA at all for the sale | Box I | Box L | Your own proceeds and basis |
Short-term means you held the coins one year or less; long-term, more than one year, counting from your original purchase date even if you moved the coins since then.
Step 4: Fill in Form 8949
For each sale, the columns are: (a) description, (b) date acquired, (c) date sold, (d) proceeds, (e) cost basis, (f) adjustment code, (g) amount of adjustment and (h) gain or loss. Take proceeds and the sale date from the 1099-DA unless they are wrong. Take the acquisition date and basis from your own records. Most crypto tax software produces a completed Form 8949, and the totals flow to Schedule D.
Worked example: coins moved between exchanges
Lisa bought 0.4 BTC on Exchange A in May 2023 for $11,000. In March 2026 she moved it to Exchange B and sold it there in August 2026 for $26,000. Exchange B’s 1099-DA shows:
- Box 1b: Bitcoin · Box 1c: 0.4 · Box 1e: August 2026 · Box 1f: $26,000
- Box 1d and box 1g: blank
- Box 9: checked (noncovered)
- Box 12a: 0.4 units transferred in · Box 12b: March 2026
Exchange B only knows the coins arrived in March 2026. Lisa’s real purchase date is May 2023, so the sale is long-term, and her basis is the $11,000 she paid on Exchange A. She reports it on Form 8949 box K:
| (a) Description | (b) Acquired | (c) Sold | (d) Proceeds | (e) Basis | (h) Gain |
|---|---|---|---|---|---|
| 0.4 BTC | 05/2023 | 08/2026 | $26,000 | $11,000 | $15,000 |
Her gain is $15,000, taxed at long-term rates. If she had left the basis blank, she would have reported a $26,000 gain. If she had used the transfer date as the purchase date, she would also have treated it as short-term and paid her ordinary income rate instead of 0%, 15% or 20%.
When the broker’s basis is wrong
Sometimes basis is reported, but it is off: a fee was missed, the broker relied on information you provided (box 8 is checked), or it used the wrong lots. In that case:
- Ask the broker for a corrected 1099-DA if the error is theirs.
- If you file before a correction arrives, use box G or J, enter the basis as reported in column (e), code B in column (f), and the adjustment that brings it to the correct figure in column (g).
- Keep a note of how you calculated the correct basis.
Records to keep
- Every 1099-DA you receive.
- Full transaction exports from each exchange and wallet, for every year you held crypto.
- Records of transfers between your own accounts, with dates and amounts.
- The reports from your crypto tax software for each year.
- Notes on how you reconstructed any basis without direct records.
Keep them for as long as you hold the coins, plus at least three years after you file the return that reports their sale.
Frequently asked questions
Will the IRS flag me if my basis doesn’t match the 1099-DA?
Reporting a basis when the form shows none is expected; that is what boxes H and K are for. What triggers automated notices is usually missing proceeds: a sale on the 1099-DA that does not appear on your return. Make sure every sale is reported and keep proof of the basis you claim. For other kinds of mismatch, see why your 1099-DA doesn’t match your records.
I can’t find any records for coins I bought years ago. What now?
Rebuild what you can from bank statements, emails and blockchain data, and document your method. If there is truly no evidence, a tax professional can help you decide on a defensible approach. Without support, the IRS can treat the basis as zero.
Do transfers between my own accounts appear on the 1099-DA?
A transfer is not a sale, so it should not appear as one. The receiving broker may show transferred-in units in boxes 12a and 12b to help match them later.
For the complete filing process, including staking income and losses, see how to report crypto on your taxes.
Sources
- IRS: Instructions for Form 8949
- IRS: Instructions for Form 1099-DA
- IRS: Revenue Procedure 2024-28 (wallet-by-wallet basis)
This article is for educational purposes only and is not tax, legal or investment advice. Tax rules depend on your individual situation; consult a qualified tax professional before filing.