The IRS started requiring crypto exchanges to send 1099-DA forms in 2025. If you traded Bitcoin, Ethereum, or any other cryptocurrency last year, you are going to get one of these forms. Many Orlando investors are seeing mismatches between their 1099-DA and what they actually owe. Here is what you need to know before you file.
What Is the 1099-DA Form?
The 1099-DA is a new tax document that crypto exchanges send to both you and the IRS. It reports your proceeds from crypto sales and transfers. The problem is that many exchanges do not know your original cost basis. They only see the sale. So the 1099-DA often shows your full proceeds as if your cost basis was zero. That means the IRS could receive a form showing you owe tax on $50,000 when you actually only made $3,000 in profit.
What Happens If the 1099-DA Is Wrong?
If you file without addressing the mismatch, the IRS will flag your return. You may receive a CP2000 notice saying you underreported income. To fix this you need accurate records of every purchase, every trade, and every transfer. That includes dates, amounts, and the price in US dollars at the time of each transaction. Most crypto platforms let you export your full transaction history. You need that file.
Is Every Crypto Trade Taxable?
Yes. Every time you trade one coin for another, sell crypto for cash, or use crypto to pay for something, that is a taxable event. Staking rewards are taxable as ordinary income when you receive them. NFT sales are taxable. DeFi activity is taxable. The only thing that is not taxable is holding. Moving crypto between wallets you own is not a taxable event as long as you have records to prove both wallets belong to you.
What About Crypto Losses?
Losses work in your favor. If you sold crypto at a loss, you can use that to offset other capital gains. Up to $3,000 per year in excess capital losses can offset ordinary income. If your losses exceed that, they carry forward to future years. Many Orlando investors lost money in the 2022 crypto crash and still have unused loss carryforwards they have never claimed. That is real money left on the table.
What If You Did Not Report Crypto in Prior Years?
The IRS has been building crypto reporting infrastructure since 2019. If you had significant unreported crypto gains, the risk of an audit is real. A voluntary amendment to a prior year return is almost always better than waiting for the IRS to find it. Amended returns come with penalties, but those penalties are smaller than what the IRS can impose if they initiate the process. We can help you figure out what to do.
Crypto Tax Help in Orlando
Tax & Crypto Resolutions specializes in cryptocurrency tax reporting. We work with Bitcoin, Ethereum, Solana, DeFi, NFTs, and every major exchange. We are at 2200 S Orange Blossom Trail Unit 2, Orlando, FL 32805. Call (407) 412-5645 for a free consultation. We will review your 1099-DA, calculate your actual gain or loss, and make sure you file correctly.
We serve individuals and small businesses in Orlando and Indianapolis. Free consultations available in person and virtually.