Turbotax workflow for entering Crypto transactions without a 1099-DA

[gm-71003]

For DEX crypto transactions that have no 1099-DA, what is the workflow in Turbotax, i.e., how is one to initiate dialog on Turbotax to enter these transactions? For e.g., if I go to Wages & Income, then under Investment Income, I click Update next to "Stocks, Cryptocurrency, Mutual Funds, Bonds, Other", it takes me to the investments sections where I have already added interest, dividend and several 1099-B's and 1099-DA's. I click on Add Investments, and then I Skip Import and I land on the page where it has 5 options to select from: (1) Interest 1099-INT, (2) Dividend 1099-DIV, (3) Stocks, Bonds, Mutual Funds 1099-B (4) Digital Assets 1099-DA (5) Other. Once I select Digital Assets 1099-DA, it takes me to the next page Let's get started typing in your digital asset info, and the very first field is Digital asset service/filer under Tell us, where you got your from or file. You cannot leave the field blank as it won't allow you to go to the next page. So what do you put in here if you did not get a 1099-DA given that these transactions are from a DEX? Thanks in Advance!

[DianeW777 · Accepted solution]

Enter DEX or Digital Asset Exchange  for the name of the Digital Asset Service, it should allow you to move forward. You can always choose 'Other' category to enter your transaction if you prefer. This is used for many investment transactions that may not be named.

Your IRS form 1099-DA reports gross proceeds, the digital asset, the number of units and the number of transactions.

1. Select Wages & Income.
2. Scroll to Investments and Savings.
3. Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) >  Add investments.
4. On the Save time and connect your financial accounts screen, select Enter a different way > Select Type it in myself, then Continue.
5. OK, let's start with one investment type, select Digital Assets > Click Continue.
6. On the screen Which bank or brokerage is on your 1099-DA, enter the information > Continue.
7. On the screen Did you get a 1099-DA from XXX?, select Yes.  Click Continue.
8. Answer the questions at the screen Tell us about the sales on your 1099-DA

Test Scenario:

When I test a scenario I entered the following:

1. Number of units: .0000000567
2. Sales date: 12/31/2025
3. Proceeds: 0 (entered the zero)
4. On the screen 'Let us know if any of these situations apply to this sale' I selected 'None of these apply'

Any digital currency you purchase becomes income at the time you redeem or sell the digital currency and must be reported .

• Cryptocurrency Guide (digital currency)

Holding Periods:

• Long term is a holding period of more than one year (one year plus one day) and receives capital gain tax treatment (0%, 10%, 15%, 20% depending on your regular rate of tax)
• Short term is a holding period of one year or less and receives ordinary gain tax treatment (your regular rate)

[gm-71003]

Thanks for your response. You mentioned - "In step 7, Did you get a 1099-DA from XXX?, select Yes."

So even if one doesn't have a 1099-DA, I still say YES at this step and proceed? I tried with No and I'm not convinced TT handles it correctly in this case, as it complains that description of the asset is unknown though I have named the asset and entered all details. Instead, If I choose the 'Other' category instead of 

Digital Assets, TT seems to handle it a little better though it's classified as an other/unnamed asset. In the light of this, would you recommend this vs the 1009-DA step 7 YES selection? Thanks.

[RobertB4444]

It sounds like either way the correct totals will be reported on the tax forms.  I would stick with the step 7 yes selection simply because I know it works and it's how I've done it.  But the 'Other' category gets the amounts on there so they can be taxed as well.  They sound good either way.

[gm-71003]

One follow-up question: "In step 7, Did you get a 1099-DA from XXX?, select Yes."

So even if one did not get a 1099-DA, one would still say YES at this step and proceed, and it's ok to say I received a 1099-DA when I didn't actually receive one in this case? Thanks in advance!

[DianeW777]

Yes, you can proceed with this even though you didn't actually receive one in your case.  Keep in mind you are entering your tax data to accurately reflect and report your income. That's what matters.

@gm-71003