Fifteen years of start dates
Stock bought in 2011, options in 2014, crypto in 2026. Each became a covered security on its own date, set out in Treasury regulation 1.6045-1(a)(15), which the final broker rules of July 9, 2024 extended to digital assets.
| Asset | Covered when acquired on or after |
|---|---|
| Most stock | January 1, 2011 |
| Stock that can use the average basis method, such as mutual fund shares | January 1, 2012 |
| Most debt instruments, options and securities futures contracts | January 1, 2014 |
| Variable rate, inflation-indexed, contingent payment and convertible debt | January 1, 2016 |
| Digital assets acquired at a broker that holds them for the customer | January 1, 2026 |
Anything outside those rules is a noncovered security, the regulation’s term for every specified security that isn’t covered. Brokers must report basis on covered sales and may choose to report it on the rest.
The crypto test, condition by condition
Three conditions decide it. The 2026 Form 1099-DA instructions want the coin acquired after 2025, bought in an account for which the broker provided custodial services, and kept in that same account right up to the sale the broker carries out. Miss one and the coin is noncovered.
The purchase can be paid for in cash, with a stored-value card, with a different digital asset, or with property or services whose disposition the broker must report. A 2026 swap of ether into a new token at a custodial exchange can therefore create covered units of the new token.
Exchange Kraken describes the same line in plainer words in its tax forms FAQ. From tax year 2026, it says, it will report acquisition costs and gains “for positions acquired in 2026 or thereafter.”
Two boxes on the form
On Form 1099-DA, box 2 is checked when basis went to the IRS, and box 9 marks a noncovered security. Kraken’s guide to its 2025 forms shows box 9 “Checked for all transactions”, which is what the rules predict for a year before any crypto could be covered.
The boxes then steer the return. The Form 8949 instructions send sales with basis reported to box G or J of Form 8949, and the rest to box H or K, where the seller supplies the figure.
The transfer that resets the status
Moving coins between platforms is the easiest way to lose covered status. Coins that arrive by transfer sit on the noncovered list in the 1099-DA instructions, beside anything acquired before 2026.
Buy in 2026 at one exchange. Move the coins to a second. Sell them there, and the second exchange has no duty to report what you paid.
The coins still had a cost, of course, and the seller now has to prove it. The move does leave a trace on the second exchange’s Form 1099-DA, which gives the number of units transferred in at box 12a and the transfer-in date at box 12b.
This entry is a general explanation and is not tax advice.