How to Read Your 2025 Combined Form 1099

Form 1099-DA

You will receive a Form 1099-DA if you sold crypto on any of our exchange applications or sites (Kraken, Kraken Pro, or Krak), or sent crypto via Krak in 2025. Crypto includes all digital assets, including stablecoins (for example, USDG or USDC).

“Selling crypto” includes:
- Selling crypto for fiat currency (e.g., BTC for USD), or
- Exchanging crypto for another crypto (e.g., BTC for ETH, BTC for USDG, USDG for USDC, etc.).

What does "sent" mean here?
“Sent” refers to transferring a digital asset to another person or business using Krak (for example, reimbursing or paying someone with your crypto). Transfers between wallets or accounts that you own or control are not considered a sale or disposition.

Is there a minimum threshold for Form 1099-DA?
There is no minimum threshold for reporting sales or sends. Even a $1 transaction is reportable.

What if I only purchased and HODL'd crypto and did not sell or send crypto via Krak in 2025?
If you only purchased or held (HODL’d) crypto in 2025 and did not sell crypto on any of our exchange applications or sites (Kraken, Kraken Pro, or Krak) or send it via Krak, Form 1099-DA reporting will not apply.

What if I transferred crypto between accounts and wallets is this considered a sale or disposition of Crypto for the Form 1099-DA?
Transfers between your own wallets/accounts are generally not sales or dispositions.

Form 1099-MISC
You will receive a Form 1099-MISC if you earned $600 or more in rewards during 2025, including:

• Staking rewards
• Airdrops
• Deposit rewards
• Referral rewards

You will receive a Form 1099-DA only if:

• You are a U.S. tax resident,
• You hold an account with our U.S. exchange entity, and
• You are not otherwise exempt from reporting (applicable to retirement accounts, corporations, etc.).

If the above apply, and you have reportable digital asset sales or dispositions, we are required to issue you a Form 1099-DA and report certain information to the IRS.

If you are a U.S. tax resident but your account is held with one of our non-U.S. exchange entities, your information may instead be reported to tax authorities under the OECD’s Crypto-Asset Reporting Framework (CARF).

In this case:

• Your information will be reported under CARF, and
• You will not receive a Form 1099-DA.

This approach helps prevent duplicative reporting of the same transactions to the IRS.

The Crypto-Asset Reporting Framework (CARF) is an international tax transparency framework developed by the Organisation for Economic Co-operation and Development (OECD).

Under CARF, participating jurisdictions exchange information about crypto-asset transactions between tax authorities.

If your account is subject to CARF reporting, your transaction information may be shared with the IRS through international tax information exchange agreements rather than through a Form 1099-DA.

To avoid duplicate reporting of the same transactions to the IRS, accounts reported under CARF will generally not also receive a Form 1099-DA.

To receive a 2025 Form 1099-DA from Kraken, you must have been a U.S. tax resident client of our U.S. Digital Asset Broker with an address in the United States or a U.S. territory as of December 31, 2025.  If your account address was outside the United States or its territories on December 31, 2025, a Form 1099-DA was not issued. In those cases, reporting may instead, in the future, fall under the OECD Crypto-Asset Reporting Framework (CARF).  Tax authorities have indicated that clients should only be reported once, either under Form 1099-DA or CARF, not both. However, regulatory coordination between these frameworks is still developing.

For the 2025 tax year, Kraken applied the following approach:

• U.S. tax resident clients with a U.S. or U.S. territory address on December 31, 2025 were issued a Form 1099-DA reporting.
• Clients without a U.S. or U.S. territory address on that date were not issued a Form 1099-DA.
• Kraken will apply this approach consistently across the Form 1099-DA and CARF frameworks until additional regulatory guidance is provided.

On Kraken.com, select your icon in the upper-right corner and go to Account. Under Personal Information, you will see the country your account is associated with.

If your total rewards (including staking rewards, airdrops, referral rewards, and deposit bonuses) are less than $600 for the tax year, Kraken did not report this income to the IRS on Form 1099-MISC.

We have still provided this information in your reports for your records. You may rely on your Kraken account records or your preferred crypto tax software when preparing your tax return.

For the 2025 tax year, we used the FIFO (First-In, First-Out) method solely to calculate and display cost basis and estimated gains or losses to you in this statement.

What this means:

• These FIFO-based cost basis (original purchase amount plus fees) and gain/loss amounts were not reported to the IRS
• The IRS received gross proceeds(sales amount) information only, where applicable
• For 2025, the IRS does not require brokers to report cost basis or gains/losses for digital assets

We used FIFO because:

• We did not solicit or receive a lot relief method election from you for 2025, and
• FIFO is the default method when no alternative method is selected

Your choices: 

• You may elect to use a different lot relief method (for example, HIFO, LIFO, or specific identification)
• You may calculate gains and losses using other sources, records, or tools
• You are responsible for determining the method that is most appropriate for your individual tax situation
• The FIFO methodology shown in this statement is provided for informational purposes and does not restrict the method you may ultimately use on your tax return to report your gains and losses.

No. Gross proceeds are not the same as gains or losses.

Gross proceeds represent the total amount received from selling or disposing of digital assets, before considering what you originally paid for those assets.

Your gain or loss is generally calculated by comparing:

• Gross proceeds (what you received when you sold or disposed of the crypto), and
• Cost basis (generally what you paid to acquire the crypto, plus certain adjustments).
  Gain/Loss Formula

Gain or Loss = Gross Proceeds − Cost Basis
Example

• You purchased 1 ETH for $1,500 (your cost basis).
• Later, you sold that ETH for $2,000 (gross proceeds)
• In this example, $2,000 is the gross proceeds, while your taxable gain is $500.

• Kraken reports gross proceeds from digital asset sales or dispositions to the IRS on Form 1099-DA.
• Gross proceeds do not represent your gain or loss.
• For 2025, Kraken also provided estimated gain/loss information to clients in the Tax Center and on your Form 1099-DA using the FIFO (First-In, First-Out) method.
• This gain/loss information is provided for informational purposes only and was not reported to the IRS for 2025.
• You may rely on your own records or third-party tax tools to determine your cost basis and calculate gains or losses for your tax return.
• If you transferred digital assets into Kraken from another platform or wallet, Kraken may not have complete acquisition information for those assets, and additional records may be needed to calculate your gain or loss.

• Applying alternative lot relief methods
• Additional transaction-level analysis
• Identifying and addressing missing cost basis
• Reviewing activity across multiple wallets or platforms
• Producing supplemental reports for your records, tax preparer or tax software

• Use of the Tax Center is optional
• Creating or linking a CoinTracker account is optional
• Using the Tax Center does not change what was reported to the IRS

What you’ll see

• Your name and mailing address
• The payer’s name and tax ID
• The tax year covered

What to do

• Confirm your information is correct
• No reporting action is required

What this section represents

• Ordinary income from staking rewards, rewards and airdrops

How it appears

• A total amount reported as Box 3 - Other Income
  • If the amount is less than $600 it was not reported to the IRS, and you may rely on your own records or this Form.

This section reflects when you sold, traded, or otherwise disposed of digital assets.
You may see totals grouped by

• Short-term
• Long-term
• Unknown holding period

Important clarification

• Gross proceeds, where required, have been reported to the IRS
• Cost basis and gains/losses shown here are informational only
• FIFO was used only to present those amounts to you

This section lists individual crypto transactions and may label them as:

• Covered (basis information available)
• Noncovered (basis not reported)

All transactions shown here roll up into the summary totals.

If applicable, your statement may include an aggregate summary for qualifying stablecoins or certain NFTs. These amounts are already included in your digital asset reporting.

1. Download and save your combined tax form for your records.
2. Verify your identity fields (name, address, last four digits of your TIN) and your state of residency.
3. If you transferred assets into Kraken from external wallets or platforms, some acquisition data may appear as missing or “unknown.”
4. Optional: We have integrated CoinTracker into our Tax Center to help you address missing cost basis directly on the Kraken website. You may also use your own records or a preferred tax tool.
5. If your name, TIN, state, or proceeds appear incorrect, please see “My Form 1099 has incorrect information?” below for instructions on how to address the issue.

Your income from staking rewards, airdrops, and other rewards is shown in Box 3 of Form 1099-MISC.

• Kraken reports this income to the IRS only if the total is $600 or more for the tax year.
• If the amount is less than $600, it is provided to you for your records but was not reported to the IRS. You may rely on your Kraken records or your preferred crypto tax software when preparing your tax return.

The IRS requires fixed formatting for electronic filing. Fields have strict character and byte limits, so longer values may be:

• Truncated
• Abbreviated
• Reformatted

This is expected and does not affect accuracy.

Both. IRS systems apply byte-based limits (often ~40 bytes per field).
Non-ASCII characters (e.g., accents) may:

• Use more space
• Be removed or replaced

No action is needed if the information is only shortened.
Request a correction if:

• The information is materially incorrect (not just abbreviated, truncated or reformatted)

No. These limits only affect formatting, and not:

• Reported amounts
• IRS reporting

We understand that liquidations can be stressful and unexpected, and we want to provide clarity on how they are reflected on your tax form.

If your crypto positions or collateral were liquidated, those transactions are included on your Form 1099-DA because, from a tax reporting perspective, they are treated as a sale (disposition) of digital assets.

When a liquidation occurs:

• Your crypto is sold to repay an outstanding balance or obligation

• The value of the crypto at the time of liquidation is treated as gross proceeds

• Those proceeds are then applied toward your debt.

Because of this, the IRS requires brokers to report these transactions on Form 1099-DA, even though you may not have received funds directly.

Not necessarily. If the value of your crypto at the time of liquidation was lower than your cost basis, you may have realized a loss. Conversely, if it was higher, you may have realized a gain.

We understand this can feel frustrating. Even though the sale was not initiated by you, the IRS treats any disposal of crypto, whether voluntary or involuntary, as a reportable event.

Liquidations fall into this category because your assets were used to satisfy a financial obligation.

If your name, last four digits of your TIN (SSN/EIN), address, state of residency, or gross proceeds are incorrect, contact Kraken Support as soon as possible to request a review and (if appropriate) a corrected statement.

If the cost-basis, gain/loss or other holding period information does not match your records, you may use your records because this information was not reported to the IRS, and this information is only on your copy of the Form 1099-DA.

If you are exempt from Form 1099 reporting either because you are not a U.S. Tax Resident or because you are exempt from reporting, please contact Kraken Support.

For the 2025 tax year, we do not provide a Document ID on Form 1099 packages. This is expected and does not impact the validity of your form or your ability to file your taxes.

If your tax software requests a Document ID, you can instead import your data using tax file exports (e.g., CSV) or connect your account directly to third-party tax aggregators (such as CoinTracker or Koinly).

No. For 2025, Kraken was not required to report your cost basis and gains/losses to the IRS, and you may calculate gains/losses using IRS-permitted identification rules.

If you’re using a form of Specific Identification, IRS rules require you to adequately identify the units by the time of the sale (and maintain records). If you did not, FIFO generally applies by default.

Consider using Kraken’s Tax Center method settings going forward and keep supporting records.

Crypto‑to‑crypto trades can be reportable dispositions (and may be taxable), because exchanging one digital asset for another is treated as a disposition of property.

If you transferred assets into Kraken from another exchange or wallet, Kraken may not have enough acquisition data to determine your basis and holding period. You may need to supply acquisition details to your tax software or preparer using your own records.

For 2025, we reported gross proceeds without basis or gains/losses to the IRS; only your copy of the Form 1099-DA contains the cost-basis and gains/losses utilizing the FIFO cost-basis method. In certain cases, for example for transfers, the cost basis may be missing, but that does not mean your basis is $0.

For example - missing cost basis for transfers:
Assume you bought 1.0 BTC for $50,000 (your basis), which you transferred from an external wallet or exchange to Kraken.  In 2025. within your Kraken account, you exchanged the BTC for $110,000 worth of ETH.

The Form 1099‑DA for 2025 may show $110,000 of proceeds on the sale of BTC, with an unknown cost basis; however, the gain is generally the difference between amount realized and adjusted basis (which is $110,000 - $50,000 = $60,000 gain before considering allocable transaction costs).

Please use your records, obtain support from a third-party crypto tax calculator (CoinTracker, Koinly, etc.), or other professional tax support in order to complete any missing cost basis information.

Fees paid in digital assets and very small disposals can create reportable lines. Some very small amounts may round to $0.00 on statement outputs or exports, depending on formatting.

The following transaction types are not required to be reported at this time:

1. Wrapping and unwrapping transactions;
2. Liquidity provider transactions;
3. Staking transactions;
4. Transactions described by digital asset market participants as lending of digital assets;
5. Transactions described by digital asset market participants as short sales of digital assets; and
6. Notional principal contract transactions.

We track cost basis for digital assets only for transactions that occur within the same Kraken account.
This means:

• We track cost basis for assets acquired and later sold within your Kraken account.
• We do not track cost basis for assets once they are transferred outside of your Kraken account.

When you transfer digital assets to:

• An external wallet
• Another exchange
• A DeFi protocol
• Any account not held with Kraken

We no longer have visibility into those assets. As a result:

• We do not track cost basis while the assets are outside of Kraken.
• We do not adjust cost basis based on activity that occurs outside of Kraken.

You are responsible for maintaining records of transactions that occur outside of your Kraken account.

If digital assets are transferred out of your Kraken account and later transferred back:

• We treat the inbound transfer as a new deposit.
• We do not automatically restore or adjust prior cost basis from before the asset left the account.
• We do not track gains, losses, or other activity that may have occurred while the asset was held elsewhere.

Because we cannot verify what occurred outside of Kraken, you are responsible for maintaining accurate cost basis records for those assets.

Digital assets can be freely transferred between wallets, exchanges, and protocols. Once assets leave our platform, we no longer have complete information about:

• Sales or exchanges that may have occurred
• Staking, lending, or DeFi activity
• Fees or other adjustments affecting basis

For this reason, cost basis tracking is limited to activity that occurs within the same Kraken account.

If you transfer assets between Kraken and other wallets or exchanges, we recommend:

• Keeping detailed records of purchase price and dates
• Using a digital asset tax calculator, (CoinTracker, Koinly, etc.) if needed
• Consulting a tax professional for complex situations

Even if cost basis is not tracked by Kraken for assets transferred out and back in, you remain responsible for accurately reporting your taxable gains and losses.

The 1099‑DA reporting described here applies to activity on the Kraken Exchange (Kraken.com / Kraken Pro / Krak and related apps). Activity in separate DeFi applications including the Kraken Wallet may not be included.

This combined statement is designed around your Kraken Exchange Account. Reporting on non-custodial wallets, for example the Kraken Wallet, is not required at this time.

You should still collect on-chain records and include them in your overall tax reporting if they include taxable events.

These terms relate to what information a broker is required to report to the IRS.

• Covered – The broker is required to report cost basis, gain/loss, and holding period information to the IRS.
• Noncovered – The broker reports gross proceeds only. Cost basis and holding period are not reported to the IRS.

For 2025, digital assets are generally treated as noncovered, meaning Kraken reported gross proceeds but not cost basis or gains/losses to the IRS.

Your original purchase price for a digital asset, including certain fees.
Cost basis is used to determine your gain or loss when you sell or dispose of the asset.
Example: If you purchased BTC for $1,000 and later sold it for $1,500, your cost basis is $1,000.
For 2025, Kraken did not report your cost basis to the IRS on Form 1099-DA.

The difference between your gross proceeds and your cost basis.

• Capital Gain – If you sold for more than your cost basis.
• Capital Loss – If you sold for less than your cost basis.

Example:
Sale price: $1,500
Cost basis: $1,000
Gain: $500
Your gain or loss is what determines your tax liability, not the gross proceeds alone.

The total amount you received from selling or disposing of digital assets.
Gross proceeds represent the full sales price before subtracting your original purchase price (cost basis), fees, or other adjustments.
For 2025, gross proceeds from digital asset sales are reported to the IRS on Form 1099-DA.

A gain or loss from selling digital assets held for more than one year. Long-term capital gains are generally taxed at reduced rates compared to short-term gains.

Income that is taxed at your regular income tax rates.
In the digital asset context, this may include:

• Staking rewards
• Airdrops
• Referral bonuses
• Other promotional rewards

These amounts may be reported on Form 1099-MISC if reporting thresholds are met.

A gain or loss from selling digital assets held for one year or less. Short-term gains are generally taxed at your ordinary income tax rates.

A wash sale generally occurs when you sell an asset at a loss and purchase the same or a substantially identical asset within a short time period (typically 30 days before or after the sale).

Under current U.S. tax law, wash sale rules formally apply to securities. Digital assets are not currently classified as securities for wash sale purposes; however, tax rules may change in the future. You should consult a tax advisor for guidance.