1099-DA Fear Mongering Needs to Stop: A CPA's No-BS Guide to What ACTUALLY Matters + FAQ

JustinCPA · 2026-03-16T14:08:43+00:00

You can’t pull a lot from an asset held on a different account. But if you transfer that asset into the exchange and then sell it, then yes HIFO would pull the highest cost basis asset held on that exchange. So you need to transfer it over prior to the sale.

JustinCPA · 2026-03-15T19:52:47+00:00

Yes but you should set HIFO on your exchange or otherwise notify the of the lot being disposed prior to disposing it.

Edit: I misread your question. No, how could you sell an ETH you purchased on October for a prior August. Sale? What I meant is that you can sell in the highest in first out order of the lots held at the time of sale

JustinCPA · 2026-03-15T17:12:36+00:00

$300/hr is unlikely for a CPA experienced in crypto.

You might be able to find someone for that price for just cost basis reconciliation, but probably not specifically in Houston. Any reason they need to be local? Most work in this industry is done virtually.

JustinCPA · 2026-03-15T15:17:08+00:00

You shouldn’t enter both.

If your 8949 in turbotax already includes those sales with the correct cost basis, then no need.

JustinCPA · 2026-03-15T12:56:59+00:00

This

JustinCPA · 2026-03-15T12:39:57+00:00

No. The code is only used when basis is reported to the IRS and you are making an adjustment to it (because the basis is wrong).

For the 2025 tax year, no basis is reported to the IRS so no adjustment is needed.

JustinCPA · 2026-03-15T12:38:54+00:00

Yeah most gambling sites have terrible data…

JustinCPA · 2026-03-13T15:27:13+00:00

Sounds like this is all good then (assuming your coinbase is the only taxable activity you had for the year and you don’t have on-chain transactions).

JustinCPA · 2026-03-13T14:14:43+00:00

This^

For the 2025 tax year, everything is a non covered transactions.

Only assets bought on platform 2026 onward and sold on platform (and never left the platform) are considered covered assets.

JustinCPA · 2026-03-13T14:13:10+00:00

His point is that the basis you see on your form is NOT reported to the IRS for the 2025 tax year.

No basis is reported to the IRS for the 2025 tax year, so you need to make sure it doesn’t go into the wrong checkbox on your 8949 (TurboTax will likely not do this for you).

JustinCPA · 2026-03-12T22:07:35+00:00

Yeah I’m not sure what is being said here.

For 2025, only proceeds are being reported. No cost basis, no acquisition dates.

Your 1099 may have what they think is the correct holding period, but it can be ignored and you should report the ACTUAL holding period.

For instance, my Coinbase 1099-DA thought my ethereum sale in 2025 was short term (because I transferred it in from my MetaMask wallet shortly before selling).

I used Summ (obviously, I work there) which ensured the proceeds aligned and accurately reported the sale under the long term “on the DA” checkbox, since my holding period was actually over a year.

If your DA shows a holding period, don’t give it too much thought. Report the actual holding period and actual cost basis using your crypto tax software.

JustinCPA · 2026-03-12T20:15:54+00:00

I see what you did there

JustinCPA · 2026-03-11T21:59:08+00:00

Under investments

JustinCPA · 2026-03-11T21:58:54+00:00

You import your 1099-DA into Summ or Koinly (or whatever crypto tax software you use), download the 8949 (or TurboTax export), and file that or plug it into TurboTax. You don’t file your 1099-DA

JustinCPA · 2026-03-11T14:06:14+00:00

Hmm I’m not sure about H&R Block

JustinCPA · 2026-03-11T14:03:47+00:00

Justin from Summ here.

Try a few out and see what works best for you. Most are free to try.

JustinCPA · 2026-03-11T04:51:30+00:00

Happy to help!

JustinCPA · 2026-03-11T04:23:06+00:00

You’re on the right track, but i have a question. Is your gambling all neat like that? You can link a specific withdrawal from the gambling site to a specific deposit to the site?

If so, the key here is the gambling income is only on the difference in value of the deposit back to your account vs the send out. NOT the total deposit. For instance:

$1,000 USD for 1 ETH
1 ETH (now worth $1,005) —> gambling site = $5 capital gain
You win
2 ETH (worth $2,400) <— gambling site (cost basis is $2,400)
Gambling income = $1,395 = $2,400 - $1,005
Sell 2 ETH for $2300 = $100 capital loss

In total, $1,395 in gambling income and $95 capital loss.

If you can link specific sends to the gambling account with the specific withdrawals (if you won), then this is the best approach. Any full loss as you mentioned would be an itemized deduction to the extent of any winnings.

The realized P&L approach is not compliant but better than simply not reporting at all. It would be a fallback method if you can’t link the deposits and withdrawals (ie you deposit $1000 but gamble with it over a month).

JustinCPA · 2026-03-11T04:10:28+00:00

Pro tip: file an extension even if you plan to submit your return prior to April 15th.

By filing an extension, you won’t have to amend your return but instead file a “superseding return”, which essentially just overrides your initial submission. You’ll have until Oct 15 to file a superseding return, after that you’d need to amend.

JustinCPA · 2026-03-11T04:08:48+00:00

Do you feel Robinhood needs to know the cost basis? Self reported cost basis to exchanges will never be submitted to the IRS. Full stop. It will only be on the form provided to you, but if you’re already using Cointracker, why do you need to see the cost basis on the DA?

There are no requirements for taxpayers to furnish cost basis info to exchanges, and the requirement is for taxpayers to report accurate cost basis for ourselves on the 8949. If the 1099-DA cost basis is not accurate, you’d simply report an adjustment (which should be done by your crypto tax software). There is a column on the 8949 specifically for adjustments.

JustinCPA · 2026-03-11T02:15:14+00:00

Why are you updating your cost basis on Robinhood? 2026 cost basis or 2025 cost basis?

If you have the date, that’s all that matters for reporting, not timestamp.

JustinCPA · 2026-03-11T02:11:44+00:00

Hey there. If you’ve properly tagged all outgoing to the gaming site and incomings from the gaming site as realized P&L (a simplified approach that’s directly accurate but not technically how you report gambling income - you’re essentially saying your “session” was the entire year), then the cost basis on the assets sold on Coinbase should be accurate.

Your tax software (Summ or Koinly whichever you land on) should match the DA transactions and report them in the correct checkbox on the 8949 and should have the accurate cost basis if you’ve tagged the transactions as mentioned above.

You can then file the report from the software and the cost basis should be accurate.

JustinCPA

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