IRS reporting for crypto, stablecoins, and payment-app income

What to take away

Form 1099-DA and digital asset broker reporting

Form 1099-DA is the new information return that digital asset brokers send to the IRS and to you. It covers sales, exchanges, and disposals of digital assets made through a broker, including many centralized exchanges and custodial platforms.

Brokers file it because Congress directed reporting on digital asset transactions the same way stock brokers report securities sales. The instructions for Form 1099-DA spell out who must file and how transfers between wallets are handled.

If you sold bitcoin on a US exchange in 2026, expect a copy in the mail or in your account inbox. The form reports gross proceeds, the dates, and the asset involved.

One detail matters more than the rest: basis. Brokers report gross proceeds for sales made on or after January 1, 2025.

Basis reporting starts later. It applies to sales made on or after January 1, 2026, and only to assets acquired on or after January 1, 2026. Brokers generally are not required to report basis for earlier buys, so those lots can show a blank basis box, and you supply the number from your own records.

The form does not calculate your gain. It reports raw numbers. You still decide short term versus long term, apply wash sale rules where they apply to digital assets, and total everything on your return.

The IRS digital assets guidance explains the underlying treatment: buying and holding is not taxable, but selling, swapping, and spending are. Keep that split in mind, because the form only captures one side of the trade.

If you moved coins between your own wallets or between platforms, the transfer itself is not a sale. Transfers appear in reporting data as movements, not disposals, and they should not create a taxable gain.

Document them anyway. A mismatch between transfers in and out is the most common reason a letter arrives months later.

A related guide covers digital wallet types compared.

What a 1099-DA does and does not show

Form 1099-K thresholds for payment apps

Form 1099-K reports payments you receive through a third-party settlement organization: payment apps, online marketplaces, and card processors. The instructions for Form 1099-K set the reporting threshold and explain which transactions belong on the form.

The threshold has moved around in recent years. Congress set a $600 figure in 2021, the IRS delayed enforcing it, and Congress brought back the higher test in 2025: more than $20,000 in payments and more than 200 transactions. A 1099-K reports gross payment volume, not profit.

It does not subtract fees, refunds, shipping, or the cost of what you sold. A rideshare driver who grossed $30,000 and netted $9,000 sees $30,000 on the form. The $9,000 is what gets taxed after expenses.

The most common mistake is treating a 1099-K as a tax bill. It is a report, nothing more.

If you sold a used couch for less than you paid, that is not income, and you should note the original cost when you file. Personal reimbursements from friends and family are not reportable either, though they can show up in gross volume if the app misclassifies them.

Business income received through an app still belongs on Schedule C. The 1099-K is the paper trail, not the tax itself. Deduct fees the platform charged, supplies, mileage, and any other ordinary business cost.

When a payment app sends a 1099-K

If a platform never collected your TIN, it may withhold on payments and still report the gross. Fix the TIN with the platform before the next filing season rather than after a notice arrives.

Form 1099-MISC for other payments

Form 1099-MISC covers a different set of payments than the payment apps do. It is the form payers use for rents, prizes and awards, other income payments, and certain medical and health care payments. Independent contractor work usually goes on Form 1099-NEC instead.

Crypto and payment-app income rarely belongs here, but the form still turns up when a payer uses the wrong box. Rent reported on a 1099-MISC goes on Schedule E. Prizes and awards generally go on the other income line of Schedule 1. Royalties have their own treatment.

A 1099-MISC does not always mean you owe tax on the full amount. Reimbursed expenses, amounts you passed through to someone else, and payments that were not actually income can reduce or eliminate the taxable portion. Keep the contract that explains the arrangement.

Form 8949 and capital gains on crypto

Form 8949 is where digital asset disposals land on your return. Each line carries the description, the dates, the proceeds, and the basis. The totals flow to Schedule D, which computes net short-term and long-term gain.

The IRS digital assets filing guidance walks through how digital asset transactions are reported and how the digital asset question is answered. Sales of crypto for dollars, swaps of one coin for another, and purchases made with crypto are all disposals. Buying and holding is not.

Short-term gains, from assets held a year or less, are taxed at ordinary income rates. Long-term gains get preferential rates. That single fact drives most of the planning around when to sell.

Basis is the hard part. If you bought on several dates at several prices, you need a method: first in, first out, or specific identification if your platform supports it. Whichever you choose, apply it consistently and keep the records that show it.

Worked example: one sale, one form

Assume you bought 0.5 bitcoin for $12,000 in 2024 and sold it for $20,000 in 2026. The broker sends a 1099-DA showing $20,000 of proceeds and, because the lot is covered, $12,000 of basis.

On Form 8949 you enter $20,000 of proceeds and $12,000 of basis. The $8,000 gain is long term because you held more than a year.

If you had sold after eight months, the same $8,000 would be short term and taxed at your ordinary rate.

Crypto held in a self-custody wallet and sold through a decentralized exchange may not generate a 1099-DA at all. The tax is still owed. You build the 8949 lines from your own transaction history, which is why wallet-level records matter even when no form arrives.

Stablecoin reporting and the digital asset question

The digital asset question sits near the top of Form 1040. It asks whether you received, sold, exchanged, or otherwise disposed of a digital asset during the year.

Answer it. A yes does not automatically raise your tax, and a no when the answer is yes invites a notice.

Stablecoins are digital assets for this purpose. A stablecoin pegged to the dollar is designed to hold value, but selling it, swapping it, or spending it is still a disposal.

The comparison to bank money is covered in electronic money, and stablecoins.

If you bought USDC at $1.00 and sold at $1.00, the gain is usually zero, but the transaction still belongs on Form 8949. The tempting shortcut is to assume a dollar peg means no reporting. The IRS treatment does not work that way.

Stablecoin income is a separate matter. Interest, rewards, and promotional payouts from holding or lending stablecoins are ordinary income in the year received. That income has a basis, and later sales use it.

Checklist before you answer the digital asset question

Moving value back to a bank is covered by the digital payment product checklist.

Deadlines and current thresholds

Most information returns for a tax year are due to recipients by January 31 of the following year, and to the IRS shortly after. That is why your mailbox fills up in the last week of January. If nothing arrives by mid-February, check your account online.

The individual return is due April 15, with an automatic extension to October 15 if you file for one. An extension to file is not an extension to pay. If you owe, the payment is still due April 15.

Estimated tax payments fall on April 15, June 15, September 15, and January 15 of the following year for people with income that is not withheld. Crypto traders, gig workers, and anyone with a 1099-K or 1099-MISC often need to make them to avoid a penalty.

Thresholds and forms at a glance

Thresholds change. The 1099-K test for the 2025 tax year is more than $20,000 in payments and more than 200 transactions, the figure Congress restored in 2025. The 1099-DA phase-in is why lots acquired before January 1, 2026 often show blank basis boxes.

If your platform is not a US broker and does not issue a 1099-DA, the reporting duty falls entirely on you. Nothing about the absence of a form changes what is taxable.

Many states with an income tax start from federal adjusted gross income, so a federal 1099-DA or 1099-K figure usually flows into a state return too. California, New York, and Illinois tax capital gains at ordinary rates, which raises the stakes on short-term crypto sales.

Records, transcripts, and correcting a wrong form

Keep records for at least three years from the date you file, and longer if you underreported income or filed a claim for credit or refund. For digital assets, keep them indefinitely in practice, because basis from an old purchase may be needed a decade later.

Good records include trade confirmations, transfer histories, wallet addresses tied to your identity, and year-end statements. Screenshots are weak evidence. CSV exports and account statements are stronger.

You can verify what the IRS has on file using the transcript service described in Get your tax records and transcripts. A wage and income transcript lists the information returns filed under your Social Security number, which is the fastest way to spot a form you never received.

If a form is wrong, contact the issuer first and ask for a corrected copy. Do not file a return that matches a form you know is inaccurate just to avoid a mismatch letter.

The consumer side of the same paperwork is covered in digital payment problems. That guide covers disputes with a provider and the record trail that supports them.

If a form arrives for a year you already filed, you generally need to amend. Amending is routine and less costly than waiting for the IRS to notice. Report the correct amount and keep the documentation that explains the difference.

Correcting a wrong form, step by step

A separate checklist covers how to trace a digital payment.

Common questions