1099-DA vs Cost Basis: Why Your Form Can Look “Wrong” (And How to Read It)

1099-DA is tied to value foundation as a result of taxes are based mostly on revenue, not on the large proceeds quantity.

1099-DA often exhibits proceeds.
proceeds = what you got once you bought or swapped crypto (cash, or the worth of what you acquired).

however your tax isn’t on proceeds. it’s on achieve/loss:

achieve/loss = proceeds − value foundation

value basis = what you initially paid for that crypto (plus charges).

instance:
1099-DA says you bought btc for $10,000 (proceeds)
you got it for $7,000 (value basis)
your actual achieve is $three,000

why individuals panic: in the event you moved coins in from one other trade or a pockets, the dealer might not know what you paid. then basis may be clean, and it will possibly appear to be the entire $10,000 is “revenue” (it isn’t).

quick examine: did you ever transfer crypto into the change from some place else? that’s often where missing foundation begins.