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 profit, not on the large proceeds number.

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

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

achieve/loss = proceeds − value foundation

value foundation = what you originally paid for that crypto (plus charges).

example:
1099-DA says you bought btc for $10,000 (proceeds)
you obtain it for $7,000 (value basis)
your actual achieve is $3,000

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

fast examine: did you ever transfer crypto into the trade from some other place? that’s often where missing foundation begins.