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1099-DA With No Cost Basis?

The new 1099-DA form often reports proceeds but no cost basis, creating inflated tax bills. We specialize in crypto transaction reconciliation and tax reporting.

ChatGPT Image Jan 19, 2026, 04_58_05 PM.png
ChatGPT Image Jan 19, 2026, 04_58_05 PM.png

What Is the 1099-DA?

  • The 1099-DA is a new IRS information return used by crypto brokers and platforms

  • It reports digital asset transactions

  • Many 1099-DAs show:

    • Proceeds only

    • “Cost basis not reported”

  • This does NOT automatically mean you owe tax on the full amount — but it can if handled incorrectly

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⚠️ Filing based solely on the 1099-DA often results in overstated taxable income

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Why “Cost Basis Not Reported” Creates Tax Problems

 

  • Crypto platforms often don’t know your true cost basis

  • Transfers between wallets and crypto platforms confuse reporting

  • Staking, bridging, DeFi, and NFTs complicate records

  • The IRS receives the 1099-DA — but not your full transaction history

 

Without proper reconciliation, the IRS may assume 100% of proceeds are taxable

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Common 1099-DA Scenarios We Fix

  •  Large proceeds with no basis

  •  Transfers reported as taxable sales

  •  Missing data from multiple exchanges

  •  Staking rewards misclassified

  •  Prior years already filed incorrectly

  •  CP2000 or IRS notice pending

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How We Fix 1099-DA Issues Correctly

  1. Full crypto transaction reconstruction

    • Wallets, exchanges, DeFi, staking

  2. Cost basis calculation

    • FIFO / Specific ID where appropriate

  3. Reconciliation to the 1099-DA

    • Explaining differences clearly

  4. Correct tax reporting

    • Capital gains, income, disclosures

  5. Support if the IRS asks questions

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We don’t guess. We document and reconcile.

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Who We Work With

  • Good fit if you:

    • Trade or invest in crypto

    • Received a confusing 1099-DA

    • Want accurate reporting, not shortcuts

    • Need CPA-level support

  • Not a fit if you:

    • Want DIY software only

    • Are looking for “cheap” crypto filing

    • Had only one small transaction

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Why Work With Bankhead Tax Advisors

  1. Our background includes working on tax audits and examinations involving the IRS

  2. We understand how the IRS reviews information returns, discrepancies, and documentation

  3. We’ve represented taxpayers in communications and matters with the IRS

  4. We focus on defensible reporting, not assumptions or shortcuts

  5. Every reconciliation is supported by transaction-level records and clear explanations

  6. Crypto tax issues aren’t just math problems — they’re compliance problems.
    Our goal is to ensure your reporting is accurate, consistent, and supportable if questions arise later.

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Book Your Crypto Tax Consultation

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