Yes, Kraken reports your digital asset activity to the IRS on Form 1099-DA, and that reporting covers more than just crypto sales. Depending on the transaction, the exchange may report crypto to crypto trades, transfers to another person through the Kraken app, and even forced liquidations of margin positions. Starting this tax year, Kraken also begins reporting cost basis on the form, but only for crypto you purchased on the exchange on or after January 1, 2026. As a result, assets acquired before that date can still appear on your Form 1099-DA with proceeds reported but no cost basis attached.
That gap matters because the information Kraken sends the IRS can be compared with the transactions and gains you report on your tax return. This guide explains what Kraken actually reports, how the IRS can cross check that information against your return, where Kraken’s cost basis reporting falls short, and the 3 steps you can take to reconcile the missing information yourself.
Key Takeaways
- Yes; Kraken issues Form 1099-DA to the IRS for every crypto sale, trade, or send on Kraken.com, or Kraken Pro, without any minimum dollar threshold.
- Kraken also reports staking, airdrop, and referral income of $2000 (prev $600) or more on Form 1099-MISC for payments made on or after January 1, 2026. Moreover, it does not issue Form 1099-K or Form 1099-B.
- Kraken fought an IRS John Doe summons for over two years before a court compelled it to comply in 2023, a sign the IRS can get your data even when an exchange resists.
How Kraken Reports to the IRS?
Kraken’s reporting obligations extend further than most traders assume, covering not just direct sales but sends, liquidations, and even how information is routed for account holders on non-US Kraken entities. The table below reflects reporting requirements for this tax year; confirm current thresholds before relying on them, since digital asset rules have shifted more than once already.
Form / Requirement | Status for Tax Year 2026 |
Form 1099-DA for gross proceeds | Required for every sale, crypto-to-crypto trade, and any “send” of crypto to another person or business via Krak. No minimum threshold, even a $1 transaction is reportable. Forced liquidations of margin or collateral positions are also treated as reportable dispositions. |
Form 1099-DA for cost basis | Required starting this tax year, but only for positions acquired on Kraken on or after January 1, 2026. Kraken only tracks cost basis for assets bought and later sold within the same Kraken account, transferring an asset out and back in resets it as a new deposit with no historical basis restored. |
Form 1099-MISC for staking, airdrops, referral rewards | Required once you earn $2,000 or more for payments made on or after January 1, 2026. This threshold was $600, for TY 2025 or before but was increased in One Big Beautiful Bill Act. |
Form 1099-B / Form 1099-K | Not issued. Kraken does not file either form for digital asset activity. |
Backup withholding | Not applied for tax year 2026. IRS Notice 2025-33 extends relief from the 24% backup withholding requirement (Section 3406) through calendar year 2026. |
CARF (Crypto-Asset Reporting Framework) | The US is not a formal CARF signatory, and Form 1099-DA serves as the domestic equivalent. Notably, if your account sits with one of Kraken’s non-US entities rather than its US broker, your activity may be reported to tax authorities under CARF instead of Form 1099-DA, Kraken applies one or the other, not both, to avoid duplicate reporting. |
Note: A handful of transaction types aren’t reportable at all under current rules, including wrapping and unwrapping tokens, liquidity provider transactions, staking itself rather than the rewards it generates, lending, short sales, and notional principal contracts.
Tax Certification and Account-Linked Data
The connection starts when Kraken collects your name, address, and Taxpayer Identification Number (TIN) as part of its account verification process. Kraken keeps this information linked to your account activity and includes it with the 1099-DA and 1099-MISC forms it submits to the IRS. This means the IRS can connect the information reported on these forms to your identity and the activity associated with your Kraken account.
Form 1099-DA and IRS Underreporter (AUR) Matching
Once the IRS receives your information from Kraken, IRS IMF Automated Underreporter (AUR) programme can compare the gross proceeds reported on your 1099-DA with the figures on your tax return. This comparison does not automatically mean you have made an error, particularly because Kraken’s 2026 cost basis reporting applies only to a limited set of transactions.
However, differences between the proceeds Kraken reports and the gains or losses you calculate can still prompt the IRS to seek an explanation, potentially through a CP2000 notice or a CP2501 notice.
John Doe Summons
The IRS doesn’t need an exchange’s voluntary cooperation to get your records. When it has reason to believe a group of taxpayers, not yet individually identified, may be underreporting income, it can petition a federal court for what’s called a “John Doe” summons. It is a court order compelling a business to hand over records on an entire class of customers meeting certain criteria, even though the IRS doesn’t yet know their names. Once a court authorizes one, the exchange is legally required to comply, whether or not it agrees with the request.
Kraken is a direct example. In May 2021, a federal court authorized the IRS to serve a John Doe summons on Kraken, seeking data on US taxpayers with at least $20,000 in cryptocurrency transactions between 2016 and 2020. Kraken disputed the IRS’s authority to demand this information, and lost. In November 2023, more than two years after the summons was authorized, a court ordered Kraken to comply or risk contempt. The case shows that resisting a summons buys time, not immunity.
Why Your 1099-DA May Not Match Your Actual Gain?
Your Form 1099-DA may show proceeds without showing the cost basis you actually paid for the asset. For tax year 2025, Form 1099-DA reports gross proceeds only, while cost basis reporting begins with transactions from 2026 onward. Even from 2026, however, Kraken may not have your basis if you transferred the asset into Kraken from another exchange or wallet because it does not have the original purchase information.
Yes, it can affect anyone who has moved crypto between exchanges or wallets before eventually selling it. For example, suppose Derek bought ETH for $14,500 on another exchange in 2023 and later transferred it to Kraken. In 2026, he sold that ETH on Kraken for $18,000. Kraken can report the $18,000 in gross proceeds on his Form 1099-DA, but it may not report a cost basis because the original purchase took place outside Kraken. Derek’s actual gain is $3,500, but the form does not provide the IRS with the $14,500 basis needed to calculate that gain.
If the IRS cannot verify your cost basis from the information available to it, the missing basis can create a risk that your taxable gain appears higher than it actually is. In a case like Derek’s, treating the basis as zero would make the entire $18,000 appear to be a gain instead of the actual $3,500 gain, which could trigger a CP2000 notice if the IRS’s figures do not match the return you filed.
If you have moved crypto between exchanges or wallets, do not assume that Kraken’s 2026 cost basis reporting captures your complete transaction history. Keep your original purchase records and transfer history so you can substantiate the basis reported on your tax return. To make things easier, KoinX can help reconstruct your cost basis across Kraken and other exchanges and wallets, including assets acquired before 2026 and later transferred to Kraken.
How to Download Your Kraken 1099-DA and Transaction History?
Kraken’s tax documents are only accessible through a browser, not the mobile apps, and the platform routes cost-basis elections and transferred-asset details through a separate Tax Center built with CoinTracker. Both steps below need to happen before you can trust the numbers on your form.
Download your Form 1099-DA
Your Form 1099-DA is the same document Kraken files with the IRS, so downloading your own copy first lets you check it against your records before you file. Here’s how you can do it:
- Sign in to your Kraken account.
Click your profile icon in the top-right corner.
- Select Tax Center
- Under Crypto Tax Summary, find and download your Form 1099-DA for tax year 2026 (PDF).
Note: Form 1099-DA for 2026 is only available for download after February 15th, 2027. For that Kraken will send you an email for the same.
Download Your Transaction History
As stated above, your 2026 Form 1099-DA includes a cost basis for transactions made on or after January 1, 2026. For transactions completed before that date, you can download your complete Kraken transaction history and upload it to KoinX to reconstruct the missing cost basis and get a complete view of your transaction details that may not appear on your 2026 Form 1099-DA.
- Sign in to your Kraken account, click your profile icon in the top-right corner, and choose Documents from the dropdown.
- In the Exports section, click Create Export in the top-right corner.
- Next you choose your export type:
- Trades for execution details,
- Ledgers for deposits, withdrawals, fees, and other balance changes, or
- Balances for a snapshot of your holdings at a specific date, including fiat equivalents where applicable.
Trades and Ledgers require a start and end date; Balances only requires one date.
- Next you choose your export type:
Next, you can tighten the export further, limit it to specific assets or trading pairs, and pick which fields show up in the file, before choosing CSV as your output format.
- Once you have selected all the necessary filters and file format click Generate to submit the request.
Note: You cannot directly export your Order history. However, you can reconstruct your order activity by reviewing your Trades export.
Your request appears in the Exports list. Processing can take anywhere from a few minutes up to a week, Kraken doesn’t send an email notification, so check the Documents page manually until the download icon activates.
Click the Download icon once it’s enabled, then import the file into KoinX to reconcile against your 1099-DA.
Note: Kraken currently does not send email notifications when your export is ready. You will need to manually check the Documents page to see when the export is available for download.
Once you have your Kraken transaction records, integrate your Kraken account to KoinX to reconstruct the cost basis for pre 2026 purchases and assets transferred from other platforms, including transactions outside Kraken’s covered asset window. This helps you reconcile your actual gains with the figures reported on your 1099 DA.
Common Misconceptions About Kraken and IRS Reporting
Kraken users often have misconceptions about how crypto transactions are reported to the IRS. Some come from outdated information, while others stem from misunderstandings about what constitutes a taxable event. Here are some of the most common misconceptions among Kraken users:
Crypto-to-Crypto Trades Aren't Taxable Since I Never Touched USD
Exchanging one digital asset for another on Kraken can be a taxable disposition is you enjoyed a profit, even if you never receive U.S. dollars. For example, trading BTC for ETH generally requires you to calculate the gain or loss on the BTC you disposed of. The fact that you received another cryptocurrency instead of cash does not make the transaction tax-free.
A Forced Margin Liquidation Isn't Taxable Since I Didn't Choose to Sell
The IRS treats any disposal of crypto as reportable, whether it was voluntary or not. When Kraken liquidates a margin or collateral position to cover an outstanding balance, that liquidation is a sale for tax purposes, reported on Form 1099-DA, and may produce a real gain or loss depending on your cost basis.
My 1099-DA Is Now Complete Since It Includes Cost Basis
Cost basis reporting starting this tax year only applies to assets acquired on Kraken on or after January 1, 2026, and held there continuously. Anything purchased earlier, transferred in from another platform, or moved out and back into Kraken still shows up as a noncovered position, proceeds reported, basis left for you to supply.
Only Foreign Exchanges Are Exposed to IRS Enforcement
Being US-based doesn’t shield an exchange from IRS pressure. Kraken itself disputed an IRS John Doe summons for over two years, arguing the agency lacked authority to demand customer records, and lost. A federal court ultimately compelled Kraken to comply in 2023, proving domestic exchanges face the same enforcement exposure as offshore ones.
Small Trades on Kraken Won't Get Reported
There’s no minimum dollar threshold for Form 1099-DA reporting on Kraken. A $1 disposition is reportable on exactly the same terms as a $10,000 one, and every covered transaction, regardless of size, feeds into the same gross proceeds total the IRS receives and cross-checks against your filed return.
How to Report Your Kraken Trades Correctly?
Reporting Kraken activity correctly comes down to three sequential steps: calculating your real gain or loss, reconciling that number against what Kraken actually sent the IRS, and filing the right forms with your return. Skipping the reconciliation step is the most common mistake, and the one most likely to trigger an IRS notice later.
Step 1: Calculate Your Actual Gain or Loss
Work from your Kraken transaction history and Tax Center data, not just the proceeds figure printed on your 1099-DA. Your real gain or loss is proceeds minus cost basis, calculated per disposition, including margin liquidations, which count as sales even though you didn’t initiate them. KoinX automates this calculation across your full trading history, correctly handling liquidations, transfers, and multi-year holdings that Kraken’s own basis tracking doesn’t cover.
Step 2: Reconcile Against Your Combined 1099
Compare your calculated gain against the figures Kraken actually reported. Pay close attention to anything marked “non-covered” in the Transaction Detail section of your combined 1099, that’s Kraken flagging a disposition where it reported proceeds but not cost basis. For each noncovered line, trace the cause back to its source: a pre-2026 purchase, an external transfer, or a liquidation, and supply your own basis documentation accordingly.
Step 3: File Form 8949 and Schedule D
Report each disposition individually on Form 8949, then carry the totals to Schedule D. Any rewards income from staking, airdrops, or referrals gets reported separately on Schedule 1. Keep your reconciliation records on file after filing, if the IRS’s automated matching system flags a discrepancy between Kraken’s reported proceeds and your return, having documentation ready is what turns a CP2000 notice into a quick resolution rather than a drawn-out review.
Conclusion
Kraken reports more to the IRS than many traders realise. In addition to crypto sales, its reporting can cover certain Kraken and forced margin liquidations, while staking and referral income may be reported separately on Form 1099-MISC. Moreover, Kraken is not shielded from IRS requests for information, as its past dispute over a John Doe summons shows.
However, greater IRS visibility does not eliminate the cost basis gap. Kraken’s 2026 basis reporting covers only assets purchased on Kraken from 2026 onward and held there continuously, leaving pre 2026 purchases, transfers, and certain liquidations for you to reconcile. Checking the Transaction Detail section for non covered positions is therefore especially important before filing.
If you have transactions across multiple years or platforms, KoinX can help simplify this reconciliation by connecting to your Kraken account, reconstructing the missing basis, and matching your transaction data with the figures reported on your tax forms.
Conclusion
Frequently Asked Questions
Will the IRS Assume My Cost Basis Is Zero If My 1099-DA Shows None?
Not automatically. A blank cost basis field means Kraken didn’t have enough data to report it, often because the asset was transferred in from elsewhere, not that your basis is actually zero. You’re responsible for supplying your own records to establish the correct figure; without them, though, a review may default to treating the full proceeds as gain.
Am I Required to Use Kraken's FIFO Calculation on My Tax Return?
No. For 2025 and 2026, Kraken was not required to report cost basis or gains to the IRS, so the FIFO-based figures shown on your statement are informational only. You may use a different lot-relief method, such as HIFO or specific identification, provided you can adequately document your chosen method at the time of each sale.
Why Does My Form 1099-DA Show a Transaction in the Wrong Tax Year?
Kraken reports all transactions using Coordinated Universal Time (UTC), which runs 5 to 10 hours ahead of US time zones. A trade made late on December 31 in your local time may show as January 1 on your form, landing it in the following tax year. This is a timing difference, not an error, and doesn’t require a corrected form.
What Should I Do if My Kraken Form 1099 Has Incorrect Information?
If your name, TIN, address, state of residency, or gross proceeds are wrong, contact Kraken Support promptly to request a corrected statement. If only the cost basis, gain/loss, or holding period looks off, no correction is needed, that information wasn’t reported to the IRS in the first place, so you can rely on your own records instead.
Does Kraken Report My Crypto Activity to My State as Well as the IRS?
Yes. A copy of your Form 1099 may be sent to the state of residence listed on your Kraken account, in addition to the IRS. If that address is outdated or incorrect, update it in your account settings, since an inaccurate state filing can create its own mismatch to resolve later.
