Does Form 1099-DA report wrapping, staking, or liquidity-pool deposits?

Generally no. Notice 2024-57 tells brokers they are not required, until further Treasury and IRS guidance, to file Form 1099-DA or furnish payee statements on wrapping and unwrapping, liquidity-provider transactions, or staking transactions (and on three other identified types: lending, short sales, and notional principal contracts). The 2026 Instructions for Form 1099-DA repeat that list. A reporting exception is not a finding that the transaction is non-taxable. The Notice says inclusion of an identified transaction does not constitute a substantive analysis for federal income tax purposes, and that no inference is intended as to how it is treated.

By Kevin Stursberg, founder, CryptoTaxEdge · Published September 24, 2026

What Notice 2024-57 actually carves out

The Notice is effective for identified transactions occurring on or after January 1, 2025. Brokers are not required to make a return under §6045(a) on the identified types, and the IRS will not impose §6721 or §6722 penalties for failing to file or furnish on them. The six identified types, in the Notice's order:

1. Wrapping and unwrapping (section 3.02): transferring a single asset A for a wrapped asset B that is redeemable solely for A and is identical except for the wrap, and the reverse unwrap.
2. Liquidity-provider transactions (section 3.03): depositing one or more assets into an automated-market-maker pool in return for a pool-interest token, and redeeming that token for a proportional share of the pool, even if the mix coming back differs from the mix that went in.
3. Staking transactions (section 3.04): locking an asset for proof-of-stake validation and receiving it back, including the liquid-staking variant that issues a different asset representing a share of the staked asset, and redeeming that receipt.
4. Transactions described by market participants as lending of digital assets.
5. Transactions described by market participants as short sales of digital assets.
6. Notional principal contracts.

This page is about the first three, because those are the shapes practitioners keep matching to a missing or unexpected 1099-DA row. Lending is covered on Is a crypto loan taxable?. Who issues a 1099-DA at all, including the DeFi-broker repeal, is Does Form 1099-DA cover DeFi and self-custody wallets?.

Two limits sit next to the carve-out, both from the Notice and the form instructions. Rewards, airdrops, and other compensation earned while wrapped, staked, or in a pool may remain reportable under other Code sections. The reporting exception does not cover them. Form 1099-DA is a proceeds form. Its 2026 instructions state separately: do not report rewards and staking payments on Form 1099-DA. Staking rewards are still ordinary income at dominion and control under Rev. Rul. 2023-14 and IRC §61. A custodial platform may report that income on a different information return, or on none.

A reporting exception is not a tax answer

Silence on Form 1099-DA means the broker was not required to tag the event as a sale for §6045. It does not mean IRC §1001 did not apply, and it does not mean IRC §61 did not apply.

The inverse is also true. If a broker reports a wrap, a stake, or a liquidity-pool deposit as proceeds anyway, the form is not the analysis. Ask the issuer for a correction if the row should not have been filed, keep the correspondence, and classify the hash. That mismatch is the same species of problem as a transfer between your own wallets that a form tagged as a sale.

How CryptoTaxEdge classifies these hashes

POST https://app.cryptotaxedge.com/v1/classify with { "chain", "hash" }. One category, one treatment from the closed enum (disposal, income, non_taxable, expense, needs_review), confidence 0 to 100 as a routing signal, needs_review: true and taxable: null when we cannot honestly assert a treatment. Confidence is not an accuracy percentage.

Do not infer treatment from the category name on bridges, generic deposits, or withdrawals (GAP-3). A wrap that is not 1:1, a pool add that also harvests fees, or a stake that issues a freely tradable receipt token the engine cannot match to liquid_staking_mint is routed to review rather than forced into a house default.

Grey-area treatments the form will not decide

These are the positions the Classification Standard already publishes. We do not invent a grey block on whether 1099-DA must report the event. That reporting question is answered by Notice 2024-57. The grey blocks are the substantive treatments, which remain contested even when no form arrives.

Wrap and unwrap. House default: same asset, different form, non_taxable, basis carries. Alternative: the unwrapped and wrapped tokens are different property, so the exchange is a §1001 disposition. No direct IRS guidance chooses between them. Full page: Is wrapping ETH into WETH a taxable event?. Custodial BTC claim tokens use the same grey with different facts: Is wrapping BTC into WBTC or cbBTC a taxable event?.

Liquidity add and remove. House default: depositing tokens for a pool position is an exchange of property for property, disposal under §1001, and the reverse on exit. Alternative: continuity of position, non-taxable until the position is finally closed. Fee income collected from the pool is ordinary income either way. Full page: How is a liquidity pool deposit taxed in the US?.

Liquid-staking mint. House default: the receipt token is treated like a wrap of the deposited asset, non_taxable, basis carries. Alternative: the receipt is a different, freely tradable token, so the mint is a disposition. Notice 2024-57 section 3.04(b) puts this mint and its redeem in the staking reporting carve-out. That still says nothing about which tax position is right. GAP-2: a redeem is served as collateral_withdraw and does not currently honor the mint election. Full page: How are liquid staking tokens taxed when minted or redeemed?.

Staking principal (same asset, no receipt token). Not a published grey area. House treatment is conservative non_taxable. Rewards that arrive with an unstake are income under the dominion-and-control test. Full page: Are crypto staking rewards taxable?.

Worked example

Illustration. On June 2, 2025, a client wraps 10 ETH into WETH on Ethereum. No Form 1099-DA arrives for the wrap. In the same year the client also stakes 32 ETH to a validator with no receipt token, deposits ETH and USDC into a liquidity pool, mints a liquid-staking token, and later claims 0.04 ETH of staking rewards.

Under house defaults the wrap is wrap / non_taxable with the disposition alternative on the record; the 32 ETH stake is staking / non_taxable; the pool deposit is liquidity_add / disposal; the receipt-token mint is liquid_staking_mint / non_taxable with the disposition alternative on the record; the reward claim is reward / income. None of those five rows is required on Form 1099-DA under Notice 2024-57. The reward is still ordinary income. The pool add is still a house-default disposal even though the broker never reported it. If the wrap legs are not 1:1, or the pool exit mixes principal with harvested fees the engine cannot split, that hash is needs_review with taxable: null.

A later sale of the wrapped token, the pool tokens, or the liquid-staking token on a custodial exchange is a sale the broker does report. Basis in those units depends on the position the firm documented on the way in.

What CryptoTaxEdge does not do on this page

• We do not decide whether a broker should have filed Form 1099-DA, and we do not amend one.
• We do not compute gain, loss, or lot basis on a wrap, a stake, a pool add, or a liquid-staking mint.
• We do not assert a filing position. Grey-area categories carry a house default and the alternative; the election belongs to the firm.
• We do not treat a missing 1099-DA as evidence of non-taxability.

Classify a transaction at https://cryptotaxedge.com/explorer?src=answers. Enter a hash; ten a day, no signup.

Frequently asked questions

Accounting firm with crypto clients? See the Firm plan.

This is informational only, not tax advice; verify with a qualified tax professional before filing.