If the numbers on your 1099-DA don't match your exchange statement, the most common reasons are: different cost basis methods, different ways of handling transaction fees, external transfers being counted twice, or the exchange treating transfers between your own wallets as a "sale." Don't rush to ask the platform to fix the form yet. Go through the following 5 checks in order, and you'll likely pinpoint most of the discrepancies.
Check 1: Is the cost basis method consistent?
The IRS allows multiple cost basis methods like FIFO, HIFO, and LIFO, but your tax software and your exchange may use different defaults. If you are using HIFO in your tax software while the exchange generates the 1099-DA using FIFO, the calculated realized gains for the same trades will definitely be different.
What to do: Open your tax software's "Account Settings" or "Tax Settings," find the cost basis method option, and confirm it matches the method the exchange used on your 1099-DA. In 2025 most major exchanges default to FIFO.
Completion standard: The method selected in your tax software is the same as the method used by the exchange to generate the 1099-DA. If they are different, first switch the software to match before comparing numbers.
Common pitfall: Many people think "any method is fine as long as you report it correctly." But the IRS automated matching system compares "Proceeds" (total gross proceeds), not realized gains. Different cost basis methods affect the cost basis but do not affect proceeds — so a method mismatch may cause the "cost" numbers to not match, not the "proceeds" numbers. You need to be clear about which number you are comparing.
Check 2: Are crypto-to-crypto transaction fees being counted twice?
Crypto-to-crypto transaction fees are recorded differently from system to system.
What to do: Check how your tax software categorizes fees. Koinly, for example, adds the fee paid in a crypto-to-crypto trade to the cost basis of the received asset. Some exchange reports, however, deduct the fee directly from the proceeds. These two approaches can make the total proceeds shown on Form 8949 appear 0.25% to 0.5% higher than on the 1099-DA.
Completion standard: Confirm whether your tax software's fee treatment logic matches the logic the exchange used to generate the 1099-DA. If not, understand that this is a normal structural difference and does not need to be corrected.
Risk reminder: If the percentage difference is noticeably far from 0.25%–0.5% (for example, several percent), it is most likely not caused by fees. Keep checking the remaining items.
Check 3: Is the cost basis missing for external transfers?
This is the most common source of discrepancies in the first 1099-DA filing season of 2025. For 2025, the IRS only requires exchanges to report gross proceeds, not the cost basis. You bought crypto on Platform A, transferred it to Platform B, and then sold it on Platform B — Platform B has no record of your original purchase, so the cost basis box on its 1099-DA is left blank or shows $0. The entire sales proceeds look like pure profit.
What to do: Look at the "Cost Basis" column on the 1099-DA. If it shows $0 or is blank, this asset is a "noncovered asset." You do not need to ask the exchange to correct the form. Instead, record the original purchase cost yourself, enter the correct cost basis number on Form 8949, and keep the original purchase records as supporting documents.
Completion standard: You know which transactions on the 1099-DA have a blank cost basis and have the corresponding original purchase records to fill in the correct numbers.
Check 4: Are wallet-to-wallet or cross-platform transfers being wrongly reported as "sales"?
When you transfer crypto from an exchange to your own wallet (or to another exchange account that you own), it is generally a "non-taxable transfer," not a "sale." However, some 1099-DA generation logic may treat the network fee paid for the transfer as a "disposal" — because the network fee is paid in crypto assets, so the small portion spent counts as a sale.
What to do: In your tax software's transaction list, filter by "Type = Transfer" and see if these records are marked as reportable transactions on the 1099-DA. If so, check the amount that corresponds to the network fee — that fee is usually worth only a few dollars and has a very small impact on total proceeds.
Completion standard: You can explain which amounts on the 1099-DA come from network fees generated during transfers (not from your intentional sales) and confirm whether those amounts should be included in the proceeds report.
Check 5: Price source differences between third-party tax software and the exchange
Tax software and exchanges may use different price data sources. For a BTC/ETH crypto-to-crypto trade, the exchange's executed price may differ slightly from the market average price used by your tax software. Koinly officially notes that if the exchange does not provide the valuation for a transaction through its API, Koinly uses a market average price, which can differ from the exchange's rate by about 0.1%. A discrepancy of a few dollars or less is normal.
What to do: In your tax software, filter for "crypto-to-crypto trades," pick one with a larger value, and manually compare the price used by the software with the actual executed price shown in the exchange's order details. If the difference is around 0.1%, it's normal and requires no action.
Completion standard: You can confirm that any discrepancy larger than 0.5% has been explained by one of the first four checks.
How to verify after completing the checks
After going through all 5 checks, write down the total proceeds number from your 1099-DA and compare it to the "total proceeds" for that exchange in your tax software. If the gap is within a few dollars, it falls within normal tolerance. If the gap is larger and you found a clear reason in the previous checks (such as missing cost basis for external transfers), enter the correct cost basis on the corresponding line of Form 8949 and note the reason in the "adjustment code" column. Do not arbitrarily lower your cost basis just to match the 1099-DA. If the gain total calculated by your tax software is lower than what is shown on the 1099-DA, you can use the adjustment column on Form 8949 to reconcile, instead of directly altering the proceeds number.
Next step: Export your final Form 8949 as a PDF, file it together with your raw transaction CSV and the 1099-DA PDF in the same folder. A full reconciliation once a year before filing is far less painful than digging through history after receiving a CP2000 notice from the IRS.
