Starting with the 2025 tax year, crypto exchanges in the US are required to send Form 1099-DA to the IRS for every user who sold or exchanged digital assets.

This form reports your proceeds — the amount you received from each sale. A copy goes to the IRS, and a copy goes to you.

Here's the catch: for 2025 transactions, exchanges are not required to report your cost basis to the IRS. That means the IRS knows how much you sold crypto for, but has no record of what you originally paid for it.

If you don't provide accurate cost basis yourself, the IRS may assume it's $0 — and you'd owe taxes on the entire sale amount, even if your actual gain was small or you took a loss.

Let's say you bought 1 ETH for $2,500 and later sold it for $3,000. Your actual gain is $500. But since the exchange only reports the $3,000 sale (proceeds) to the IRS without your $2,500 cost basis, the IRS could assume your gain is the full $3,000 unless you report it correctly.

That's where Kryptos comes in.

Kryptos walks you through a guided workflow to:

The entire process happens on the Reports → 1099-DA page inside Kryptos.

To get the most accurate results, make sure you've done the following before starting:

Head to Reports → 1099-DA. You'll see the main dashboard listing your exchanges.

Once connected, the exchange appears in your list with a status of Not Started. This means Kryptos has your transaction data and is ready for you to begin.

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Click "Start" next to the exchange name to open the workflow.

The first step asks you to upload the 1099-DA PDF issued by your exchange. Kryptos shows you exactly where to find it — for example, on Kraken you'd go to Taxes → Tax Center → Documents and download your 1099-DA.

Once you have the file, drag and drop it into the upload area. Kryptos will extract all the transaction data from the PDF automatically.

A few things to keep in mind:

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After the upload, Kryptos uses AI to extract every sale transaction from your PDF into a table. Before moving forward, you'll want to make sure the extraction is accurate.

You'll see a side-by-side view — the extracted table on the left, and your original 1099-DA PDF on the right. Go through each row and compare.

What to check:

Once everything looks right, click "Next" to move on.

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This is the core of the workflow. Kryptos compares the proceeds reported on your 1099-DA against the proceeds calculated from your synced transaction history.

At the top of the screen, you'll see a summary showing:

Below that is a transaction-by-transaction breakdown. Each row shows the 1099-DA proceeds vs. Kryptos proceeds, the difference, and a status: Matched or Mismatched.

If you see mismatches:

Use the tabs at the top to switch between "Reported on 1099-DA" and "Not Reported on 1099-DA" to see the full scope of your activity.

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Important: For 2025, cost basis is not reported to the IRS by exchanges. These transactions go on Form 8949 Part 1 with Box B checked — meaning basis was not provided to the IRS. This is why reconciling here and letting Kryptos calculate your cost basis is essential.

Once your proceeds reconciliation shows $0.00 difference, you're ready to generate your tax form.

You'll see a Summary at the bottom showing:

Click "Generate Form 8949". Once it's ready, you'll see a confirmation and a "Download 8949 Form" button.

The download is a ZIP file containing your Form 8949 reports as PDFs, with separate files for matched and mismatched transactions — giving you a clear audit trail.

Back on the main 1099-DA page, the exchange status will automatically update to Completed.

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Once you've downloaded your Form 8949 ZIP from Kryptos, you're ready to file. Kryptos reports are compatible with TurboTax, H&R Block, TaxAct, Form 1040 (Schedule D), and can be shared directly with your CPA or tax professional.

If you get stuck at any step, reach out to us at [email protected] and we'll help you through it.