An incorrect Form 1099-DA is a broker digital asset statement that misstates the proceeds, basis, dates, units or covered status of a sale, or reports as a sale a transaction that was not one. Because the broker files the same figures with the IRS, the error sits in the IRS's records as well as the customer's copy.
The form is only as good as the broker's own records and the customer's account history at that broker. Common errors are a withdrawal to the customer's own wallet reported as a sale, a crypto-to-crypto exchange valued at a price that does not match the trade, a trading fee omitted from the proceeds calculation, a covered sale whose basis reflects a different lot from the one the customer identified, an order reported twice because it filled in parts, and units attributed to the wrong account. A blank basis field on a noncovered unit is not an error; it is the rule working as written.
An error is found by comparing the form to the taxpayer's own history, which is the ordinary work of 1099-DA reconciliation. A form that ties line by line to the exchange's transaction export and the taxpayer's lot records is correct; a line that cannot be located in the history, or that carries a different number, is the one to examine.
Two things, in parallel. The first is to ask the broker for a corrected form, with the evidence: the transaction record from the exchange itself, the on-chain record for a transfer, or the lot identification that was given before the sale. A corrected form replaces the original in the IRS's records and removes the mismatch at source. The second is to file the return on the correct figures whether or not the corrected form arrives in time, because the taxpayer's obligation is to report the actual gain or loss, not the broker's version of it.
Form 8949 is built for this. Where the broker reported the basis of a covered digital asset incorrectly, the basis shown on the form is entered and the difference is taken through the adjustment column using code B, the code Form 8949 assigns to basis reported incorrectly on a broker statement. Where proceeds or other details are wrong, the return reports the correct proceeds and the adjustment the form's instructions provide for that case, with the supporting record kept on file. Copying an incorrect form onto the return, or leaving the sale off because the form is wrong, are both worse than reporting the right number with an adjustment the IRS can see.
The evidence is what makes the correction hold. A broker's figure reaches the IRS with the broker's authority behind it, and a different figure on the return needs a record that shows why: the exchange history, the matched withdrawal and deposit for a transfer, the cost basis trail for the lot actually sold. The same records are what an examination would ask for, and IRS audit support begins with them.
An exchange reports an ETH for SOL swap using a price for SOL that is 6% below the price at which the trade actually executed. The taxpayer copies the form's proceeds for the ETH side and records the SOL received in their own software at the executed price. The ETH gain is understated on the return, the SOL basis is overstated in the records, and the two sides of one trade no longer agree. The gap reappears as an unexplained difference when the SOL is sold, possibly years later.
Read our 1099-DA accounting and cost basis reconciliation
CountDeFi identifies and documents Form 1099-DA errors against your complete transaction history, including corrected-form evidence, Form 8949 adjustment codes and swap valuation tie-outs. See pricing.
