Why reconciliation matters
Since 2025, custodial exchanges report your crypto sales to the IRS on Form 1099-DA. For assets bought in an account on or after January 1, 2026, they also report basis. But coins bought earlier, or transferred in from another exchange or wallet, often appear with no cost basis. If your return simply copies the form, it can look like the entire sale price is profit, and the IRS's automated matching will compare your return to that form.
What a reconciliation includes
- Collect complete transaction histories from every exchange and wallet you've used, not just the ones that issued a 1099-DA.
- Trace transfers between your own accounts so they aren't treated as sales, and carry cost basis across.
- Rebuild basis under the wallet-by-wallet rules that apply from 2025, including the IRS safe harbor for assigning existing basis.
- Match every 1099-DA line to your records and identify differences.
- Prepare Form 8949 in the digital-asset boxes, with the correct basis and adjustments.
- Document everything in a workpaper you can rely on if the IRS asks.
Who needs one
- Anyone who moved crypto between exchanges or self-custody wallets
- Stablecoin users with USDC or other stablecoins transferred in
- Active traders with multiple exchanges
- Anyone who received a CP2000 notice based on a 1099-DA
For a deeper explanation, read The 1099-DA Trap.
Frequently asked questions
Why does my 1099-DA show no cost basis?
Brokers generally report basis only for assets acquired in that account on or after January 1, 2026. Coins bought earlier or transferred in are usually reported without basis.
Can I just report the 1099-DA as it is?
Only if the basis it shows is complete and correct. Where basis is missing, reporting it as is can overstate your gain significantly.
What records do I need?
Transaction histories (CSV exports) from each exchange and wallet addresses for self-custody wallets. We'll tell you exactly what's missing.
Can you fix prior-year returns too?
Yes. If earlier returns overstated or understated crypto gains, we can review them and prepare amended returns where appropriate.