Start with the activity, the year, and the reporting method

You sold $80 of an NFT in March, moved some USDC around in June, and the statement that showed up covers almost none of it.

That gap is usually one of three mechanisms, not a mistake: a de minimis dollar threshold a broker may apply, a named transaction category the IRS has temporarily carved out of broker reporting, or a payment-processor rule with a hard cliff.

Broker gross-proceeds reporting began for transactions on or after January 1, 2025, and covered-security basis reporting begins for transactions after 2025 (current figure at the IRS).

The operative thresholds sit in the IRS Instructions for Form 1099-DA; Treasury Regulations section 1.6045-1(d)(2)(i)(C) governs the payment-processor $600 rule, and sections 1.6045-1(d)(10)(i) and (iii)(B) govern the optional qualifying-stablecoin $10,000 and specified-NFT $600 rules.

The six excluded transaction categories come from Notice 2024-57.

Reporting thresholds and temporary exclusions

Activity or asset Threshold or exclusion Conditions and reporting outcome Still taxable? Source and date
Qualifying stablecoins, designated sales $10,000 per customer, per year Optional broker method only. Aggregate gross proceeds net of allocable digital asset transaction costs from all such sales effected by that broker. At $10,000 or less, no reporting; above $10,000, the designated sales are reported in aggregate by stablecoin type. Tax rules still apply; this exception does not decide taxability IRS, Instructions for Form 1099-DA, as of 2026
Specified NFTs $600 per customer, per year Optional broker method only. Aggregate gross proceeds net of allocable transaction costs from all specified NFT sales. At $600 or less, no reporting; above $600, all of that customer's specified NFT transactions are reported under the optional method. Tax rules still apply; this exception does not decide taxability IRS, Instructions for Form 1099-DA, as of 2026
PDAP sales, processor of digital asset payments $600 per customer, per year Sales first removed under the optional stablecoin or specified-NFT methods are excluded when testing the total. At $600 or less, no reporting; above $600, all of that customer's PDAP sales are reported. Tax rules still apply; this exception does not decide taxability IRS, Instructions for Form 1099-DA, as of 2026
Wrapping and unwrapping Pending further guidance Excluded from broker information reporting pending further guidance. Tax rules still apply; this exception does not decide taxability IRS, Notice 2024-57, as of 2024-07-15
Liquidity-provider transactions Pending further guidance Excluded from broker information reporting pending further guidance. Tax rules still apply; this exception does not decide taxability IRS, Notice 2024-57, as of 2024-07-15
Staking transactions Pending further guidance Excluded from broker information reporting pending further guidance. Rewards and staking payments are not reported on Form 1099-DA at all; another income form may cover them. Tax rules still apply; this exception does not decide taxability IRS, Notice 2024-57 and Instructions for Form 1099-DA
Lending Pending further guidance Excluded from broker information reporting pending further guidance. Tax rules still apply; this exception does not decide taxability IRS, Notice 2024-57, as of 2024-07-15
Short sales Pending further guidance Excluded from broker information reporting pending further guidance. Tax rules still apply; this exception does not decide taxability IRS, Notice 2024-57, as of 2024-07-15
Notional principal contracts Pending further guidance Excluded from broker information reporting pending further guidance. Tax rules still apply; this exception does not decide taxability IRS, Notice 2024-57, as of 2024-07-15

That last column is not a prediction about your gain or loss. It means the taxpayer's reporting duty sits outside the broker's, so an absent line on a statement leaves the underlying question where it was.

Classification checklist

  1. Pin the sale year. The rules differ between the first gross-proceeds year and the years that follow, and the withholding relief is keyed to the transaction year.
  2. Name the activity and the broker who effected it. One wallet's activity can sit across a centralized exchange, a payment processor, and a category nobody reports yet.
  3. Ask whether the optional method applies. The stablecoin and NFT limits belong to a broker that chose that method. If you cannot tell, read the broker's documentation - an unknown condition is not an exemption.
  4. Total the right annual figure. Aggregate gross proceeds net of allocable digital asset transaction costs, per customer, per year, for that broker. For a payment processor, strip out the sales already removed under an optional method before you test the total.
  5. Write down the form result and the tax question separately. Two lines in your records: "reported / not reported, and why," then "how this is treated on the return."

When the stablecoin and NFT thresholds apply

Both limits are annual and both belong to a broker's optional reporting method, which is where most vendor summaries go wrong.

Under that method, a broker need not report a customer's designated sales of qualifying stablecoins when aggregate gross proceeds, net of allocable digital asset transaction costs, from all such sales effected by that broker come to $10,000 or less for the year.

The boundary is inclusive: exactly $10,000 sits inside the exception. Above $10,000, the broker reports the designated sales in aggregate by stablecoin type rather than trade by trade.

The specified NFT version runs on the same machinery with a smaller number: aggregate gross proceeds from all specified NFT sales, net of allocable transaction costs, of $600 or less for the year means no report, and $600 exactly is still inside.

Cross it, and the broker reports all of that customer's specified NFT transactions under the optional method, not just the ones after the crossing point.

The error we see most in reader questions: someone sells eleven NFTs at $200 each, notes that every sale is under $600, and concludes none are reportable. The test is the annual aggregate for that broker, so $2,200 clears the limit and the whole set comes into scope.

Neither figure is a tax exemption. Both describe only what a broker using that method has to send in.

How the $600 payment-processor threshold works

A processor of digital asset payments settles your digital asset payments to merchants or recipients, and its threshold is its own rule, not a copy of the NFT limit. Order matters: first remove any sales already excluded under the optional qualifying-stablecoin or specified-NFT methods, then total what remains for that customer for the year.

At $600 or less, the processor is inside the exception. Above $600, all of that customer's applicable PDAP sales are reported.

A second common example: a reader totals $740 of PDAP sales, assumes the report covers the $140 above the line, and reconciles their records to that number. There is no excess-only reporting; the cliff flips the whole set from unreported to reported.

None of this calculates tax. It describes the processor's obligation under Treasury Regulations section 1.6045-1(d)(2)(i)(C) and the form instructions, not what belongs on your return.

Which activities are temporarily excluded?

Notice 2024-57 named six transaction types that brokers are not required to report while further guidance is pending: wrapping and unwrapping, liquidity-provider transactions, staking, lending, short sales, and notional principal contracts.

They are the six table rows with no dollar figure, because the exclusion is categorical and temporary by its own terms. The notice governs broker information reporting only; it does not settle the tax consequences of any of those activities.

Rewards and compensation earned inside these activities are a separate matter. Rewards and staking payments are not reported on Form 1099-DA; another income form may cover them, and the taxpayer's reporting duty for that income stands either way. So a person who staked all year and received no 1099-DA has learned something about Form 1099-DA and nothing about their income.

For the recognition side of that, check when staking rewards become income.

In your own records, label these rows with the category name from the notice, not "no form," so you can find them again when guidance changes.

What the withholding line means

The backup withholding rate is 24%.

It shows up when a payor has to withhold because a taxpayer identification number is missing or invalid, among other conditions, and the reduced payout you see is the after-withholding amount rather than a penalty.

Timing matters. Notice 2025-33 relief applies to all 2025 and 2026 transactions. It also applies in 2027 to transactions for customers whose name and TIN return a match through the IRS TIN Matching program, and to qualifying preexisting accounts with a non-U.S. address.

Relief continues until further guidance for certain NFT or real-property dispositions and for certain PDAP sales. So the sale year and the account's condition together decide whether relief was available, and neither can be inferred from the payout figure.

A smaller-than-expected proceeds number has several possible causes, including fees, the netting of transaction costs, or a partial fill. Before drawing a conclusion, locate the withholding field on your form.

If the form does show federal income tax withheld and you need to fix the cause or recover the amount, that is individual account work - check a W-9 or backup withholding problem has the W-9 and TIN steps.

Withholding does not change what you owe. It changes what has already been paid toward it.

Check these warning signs before treating a missing form as the answer

Six patterns turn a correct rule into a wrong conclusion.

  • Applying an annual limit per trade. Twelve $150 NFT sales are not twelve exempt sales. Total the year, per broker, net of allocable transaction costs.
  • Treating an optional method as universal. The stablecoin $10,000 and NFT $600 limits exist only for a broker using that method. If the broker's reporting documentation does not tell you, that is an open question to resolve, not an exemption to claim.
  • Reconciling only to the amount above a cliff. Passing $600 of PDAP sales brings all of that customer's applicable PDAP sales into the report, not the surplus.
  • Reading a temporary exclusion as permanent. The Notice 2024-57 categories are excluded pending further guidance, and the notice never addressed the tax treatment of the underlying transactions.
  • Carrying a staking income-form threshold into 1099-DA. A threshold that governs when a staking income form is issued has a different scope and cannot stand in for a 1099-DA threshold. Rewards and staking payments do not go on this form at all.
  • Ignoring the sale year and account condition on withholding. Check which year the transaction fell in and whether the account met the relief conditions before deciding what the 24% line means; take the account-level fix to check a W-9 or backup withholding problem.

Next step, and it takes ten minutes: write the classification for each cluster of activity into the same file as your transaction exports, with the year, the broker, the method question, and the annual total you used, so next season starts from your own dated note rather than a fresh guess.

Then see what else may be absent from a broker form to close the remaining gaps, or return to the Form 1099-DA guide for the rest of the series.

Sources

  • IRS, Instructions for Form 1099-DA - de minimis thresholds; optional qualifying-stablecoin and specified-NFT methods; PDAP reporting; rewards and staking payments excluded from this form. irs.gov/instructions/i1099da (retrieved 2026-09-26, as of 2026; 2025-onward reporting scope)
  • IRS, Notice 2024-57, 2024-29 I.R.B. 67 - six transaction categories pending further guidance. irs.gov/pub/irs-drop/n-24-57.pdf (as of 2024-07-15)
  • IRS, Digital Assets - backup withholding relief scope, including the conditional 2027 cases and the categories continuing until further guidance. irs.gov/filing/digital-assets (retrieved 2026-09-26, as of 2026)
  • IRS, Notice 2025-33, 2025-27 I.R.B. 4 - extension and modification of backup withholding transition relief. irs.gov/irb/2025-27_IRB (as of 2025-06-12)
  • IRS, Backup Withholding - general 24% rate. irs.gov/businesses/small-businesses-self-employed/backup-withholding (retrieved 2026-09-26)