Covered vs. noncovered in plain English
| Record situation | Coinbase status described in current guidance | What you still need |
|---|---|---|
| Bought on Coinbase on/after Jan. 1, 2026 and held there until sale | Potentially covered | Review the reported basis for accuracy. |
| Bought on Coinbase before Jan. 1, 2026 | Noncovered | Your own acquisition records. |
| Transferred in from an outside wallet/exchange | Noncovered | Original purchase records + transfer trail. |
Why 2026 is not “broker basis means stop keeping records”
The IRS’s 2026 Form 1099-DA instructions require basis reporting for covered digital assets sold after 2025. But transferred assets and other noncovered holdings can still leave the taxpayer responsible for basis records.
The lot-identification issue most people will miss
IRS Notice 2026-20 extends temporary relief through December 31, 2026 for certain ways of making an adequate identification of digital-asset units held by a broker. The notice also says that, when its conditions are met, the units identified on a taxpayer’s books and records can control for federal income tax purposes even if the broker’s information does not match those books and records.
Records worth keeping during 2026
- Acquisition date, price and fees for each lot.
- Broker account where the asset was held.
- Any transfer out and transfer back in.
- Lot-identification or standing-order records made before a sale when relevant.
- Broker confirmation and the eventual 2026 Form 1099-DA.
Frequently asked questions
What is covered?
Coinbase describes covered assets as crypto acquired on or after January 1, 2026 and held at the same exchange until sold.
Why is transferred crypto noncovered?
Coinbase says assets transferred from another wallet or exchange are noncovered because Coinbase does not have the original purchase records.
Can broker basis differ from my records?
IRS Notice 2026-20 provides temporary relief for certain adequate-identification methods through December 31, 2026 and explains that broker-reported information may not match a taxpayer's books and records in those circumstances.