New 1099-DA Reporting Creates More Headaches for Taxpayers

It’s unclear how exchanges are going to manage customer basis and data tracking because 1099-DA reporting is currently deferred until final regulations are issued. One thing is clear, though – there will be differences and taxpayers will have extra work to correctly adjust gains and losses on their tax returns. Form 8949, used to report the detail all crypto trades, has adjustment codes to deal with incorrectly reported basis and other issues. However, this is easier said than done. In addition to the normal crypto tax headaches, taxpayers must track 1099-DA reconciliation differences, calculate adjustments and figure out reporting so final gains and losses are correct. There are also many other issues too numerous to mention here.