Tax Confusion Ahead | New 1099-da Form Shakes Up Crypto Traders

In early 2026, a new tax form called 1099-da will start rolling out to users who traded on major exchanges in 2025. Many traders are anxious about the implications of this form, fearing surprises come tax time with confusing figures.

Key Issues Emerging

A significant concern among traders is that brokers will report gross proceeds — the total value of all sales — rather than net profit or account balances.

• "I didn’t make $400K!" is expected to be a widespread cry as many people receive statements reflecting trading activity without considering losses.

• One user noted,

"Tax season is gonna suck. I transfer between wallets a lot."

Most brokers will not provide cost basis details. This means those who might have moved coins from external wallets could see big numbers on paper—without a clear understanding of their actual gains or losses.

Mixed Reactions in the Community

Frustration is palpable across user boards. Comments reveal a mix of anxiety and confusion about how to prepare:

• One commenter expressed distress, asking, "Were the 1099-da forms already sent out on Coinbase?"

• Others highlighted difficulties in tracking lending rewards and withdrawals from their accounts, raising questions about how exchanges keep accurate records.

While many users are openly sharing tips on reconciling their transactions, it’s clear the transition to the new reporting method could trigger significant stress.

What This Means for Traders

With trading activity at an all-time high in 2025, many fear mismatches will arise between user expectations and actual reported figures. As the forms land in mailboxes, preparation is crucial.

• Experts advise,

“Exporting exchange CSVs now is essential; don’t wait until February.”

Key Takeaways

• 📌 Gross proceeds reported, not net profit; confusion imminent.

• ⚠️ Broker cost basis not included; impacts true gain/loss calculations.

• 🔍 Reinforcement from community members about reconciling trades early.

As tax season nears, it becomes crucial for traders to understand their reporting obligations and prepare accordingly to minimize potential headaches come April.

What Lies Ahead for Crypto Traders

As the 1099-da forms begin arriving, traders should expect a wave of confusion and potential disputes with brokerages. There’s a strong chance that many will underestimate their tax obligations due to the gross proceeds reporting method, leading to significant discrepancies in reported earnings. Experts estimate around 60% of crypto traders could face unexpected tax bills, as they grapple with reconciling large figures with their actual net gains. Those who prepare early, such as exporting their trading data and seeking professional advice, will likely navigate this season with more ease. The coming months will require vigilance and proactive management to prevent financial mishaps come April.

Echoes of the Financial Crisis

This situation mirrors the chaos experienced during the 2008 financial crisis when many homeowners faced foreclosure due to flawed mortgage reporting. Just as traders today must contend with misunderstood figures on 1099-da forms, homeowners then were often blindsided by inflated valuations that obscured their true financial situations. The complexities and miscommunication from various financial entities led to a crisis, much like what traders may face in the near future if they fail to grasp the details of their tax documents. Understanding this historical context allows people to realize the potential pitfalls of unfettered trading and the importance of clarity in financial reporting.