When the form starts showing cost basis
For 2025 sales, Form 1099-DA reports gross proceeds and brokers are not required to report basis. That case is covered in what to check when a 1099-DA does not match your software.
For sales from January 1, 2026, the IRS instructions for Form 1099-DA require brokers to report basis in box 1g for covered securities: generally, digital assets acquired after 2025 in a custodial account with that broker and held there until the sale. Assets bought earlier or transferred in are noncovered (box 9), and their basis may be left out. So the first forms with reported basis arrive in early 2027, and that basis can be a figure your software does not show.
Why the two basis figures can differ
- Lot order. The IRS instructions say that if no identification is provided at or before the sale, the broker generally reports the sale of the earliest units first. If your software is set to pick another lot, such as the highest cost, the same sale gets a different basis.
- Your identification is in your records, not at the broker. Under IRS Notice 2026-20, through December 31, 2026 taxpayers may identify units, or record a standing order, in their own books and records for units held by a broker. The notice states that for 2026 transactions, the basis a broker reports “may not match the lot identification and basis” on the taxpayer’s books and records.
- One account versus all accounts. The broker’s default looks only at units of that asset held in its custody. Software that calculates across all your wallets can match the sale to a purchase made somewhere else.
- Transferred-in units. Units moved in from another account are noncovered at the receiving broker. If a sale draws on them, basis for that part may be missing from the form while your software still has it.
- Fees and imported history. Box 1f proceeds are reduced by transaction costs, and software may record fees separately. Duplicate imports or transfers recorded as purchases also change the basis your software calculates.
Compare in this order
- Match the scope. One broker, one tax year, and only the lines where box 9 is not checked.
- Compare proceeds first. If proceeds already differ, resolve that before looking at basis.
- Compare each sale’s acquisition date and basis. Put the lot on the form next to the lot your software used for the same sale.
- Check the lot method. Note your software setting and whether you identified units or recorded a standing order before the sale, and when.
- Check the account scope. Does your software calculate per account or across all wallets?
- Write down each difference with its source rows: lot order, account scope, transferred-in units, fees, or a history error.
Demo: one sale, two basis figures
Fictional records · No tax calculation.
- Units held at Exchange B 0.20 BTC
- Lot 1: 0.10 BTC bought in February 2026 for $6,000. Lot 2: 0.10 BTC bought in June 2026 for $9,000. Both bought and held at Exchange B.
- Form 1099-DA basis $6,000
- Sale of 0.10 BTC in September 2026. No identification at the broker, so the earliest units are reported.
- Software basis $9,000
- The same sale, with the software set to use the highest-cost lot first.
Both sources have the full history; the $3,000 difference comes from lot order alone. The note records what was identified, when, and where. Which basis applies is a decision for your CPA or EA.
Document the difference for your preparer
- The Form 1099-DA and the broker’s detailed transaction export.
- Your software report and its settings: lot method and account scope.
- Any identification or standing order you recorded, with its date.
- A short note for each difference, with source rows. Unresolved items stay visible as open questions.
The IRS instructions for Form 8949 describe how basis adjustments are entered. A documented comparison gives your CPA or EA the evidence; how to report it is their decision.
When a records review can help
If basis differs across several brokers, assets, or transfers, Elena’s Form 1099-DA reconciliation compares each form with your source records and software, traces the lots behind each difference, and documents the result for your preparer. Tax advice, return preparation, and filing are not included.
This guide is general information based on IRS instructions and Notice 2026-20 as of October 2026. It is not tax advice. Rules for later years may change.
See how the records fit together
View the illustrative record package to compare source rows, a working ledger, correction notes, and an open-items list.
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