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Form 1099-DA Box 1h and 1i: Market Discount, Wash Sales

Updated October 17, 2026. Quick answer: Boxes 1h and 1i of Form 1099-DA are two adjustment boxes next to cost basis. Box 1h shows accrued market discount on a digital asset that is also a debt instrument, and box 1i shows a wash sale loss that was disallowed on a digital asset that is also stock or a security. Any amount belongs with the sale on Form 8949 and Schedule D.

Form 8949 for 2025, read code by code: Form 8949 code D and Form 8949 code W.

What boxes 1h and 1i report

Both boxes sit directly under box 1g, the cost or other basis. The recipient instructions printed on the form describe them in one sentence each, and the instructions the broker follows add one more line each. Together they say who these boxes are for.

The common thread is the phrase about what the digital asset is. These boxes do not apply to a digital asset just because it is crypto. Box 1h “Shows the amount of accrued market discount for digital assets that are also debt instruments for tax purposes.” Box 1i “Shows the amount of nondeductible loss in a wash sale transaction involving digital assets that are also stock or securities for tax purposes.” The surrounding boxes are covered on the pages for Form 1099-DA box 1g and Form 1099-DA box 1f, and the full layout of the form is in the Form 1099-DA boxes guide.

Box 1h: accrued market discount

The form does not define market discount, so Publication 550 is the place to read it. The publication says: “Market discount arises when the value of a debt obligation decreases after its issue date.” It adds: “If you buy a bond on the secondary market, it may have market discount.”

The same publication explains what happens when you hold a market discount bond. It says “When you buy a market discount bond, you can choose to accrue the market discount over the period you own the bond and include it in your income currently as interest income.” It then says that without that choice, “You must treat any gain when you dispose of the bond as ordinary interest income, up to the amount of the accrued market discount.”

The same idea for conventional bonds is on the page about market discount on Form 1099-INT. The recipient instructions send you onward: “For details on market discount, see the Schedule D (Form 1040) instructions, the Instructions for Form 8949, and Pub. 550.”

Box 1i: wash sale loss disallowed

Publication 550 describes the rule behind box 1i: “A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:” and then lists what counts, starting with “Buy substantially identical stock or securities”. The consequence follows directly: “If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities”.

Box 1i is the broker reporting that disallowed loss to you. The broker is told: “Increase the adjusted basis of the acquired digital asset by the amount of the disallowed loss reported in box 1i.”

The broker’s duty to fill the box is limited. The filer instructions say: “if both the sale and purchase transactions occur in the same account with respect to such tokenized securities with the same CUSIP number, you must report the amount of the disallowed loss under section 1091 in box 1i.” They also say: “you are permitted, but are not required, to report in box 1i any other loss for a tokenized security that is disallowed under section 1091.” A blank box 1i therefore does not prove that no loss was disallowed. Publication 550 makes the same point for stock: “you cannot deduct a loss from a wash sale even if it is not reported on Form 1099-B.” The comparison with the stock form is on the page for Form 1099-B box 1g, and the question people ask most, whether any of this reaches ordinary crypto, has its own page: does the wash sale rule apply to crypto.

A worked example from the broker instructions

The instructions to the broker include a wash sale example for a digital asset that is a tokenized security treated as stock or securities under section 1091, bought back within 30 days in the same account with the same CUSIP number, and it shows how the boxes fit together on one form. It reads: “Since Alex’s loss is $400 ($1,000 minus $600), but the loss on 75 units is disallowed, Alex’s disallowed loss is $300.” It then tells the broker what to enter: “Report the $600 gross proceeds from the sale in box 1f, $1,000 basis in box 1g, and $300 wash sale loss disallowed in box 1i.” The last line is the one a recipient should keep: “The $300 disallowed loss is added to Alex’s basis in the newly purchased 75 units.”

Read as a recipient, the form would show $600 in box 1f, $1,000 in box 1g and $300 in box 1i. The loss that still counts on this sale is the $400 loss less the $300 disallowed, which is $100. That last step is an illustration, not an IRS example.

Why these boxes are often blank

The recipient instructions give two reasons. The first is box 9: “If box 9 is checked, box 1h may be blank.” and “If box 9 is checked, box 1i may be blank.” Box 9 is the noncovered security checkbox, explained with box 2 on the page for boxes 2 and 9. See boxes 1c, 1d and 1e for the dates the broker may also leave out.

The second reason is the optional method for stablecoins and NFTs. The filer instructions say a broker using it “may leave boxes 1d, 1e, 1g, 1h, 1i, 2, 3a, 3b, 5, 6, 8, 9, 12a, and 12b blank.” That method is covered on the page for boxes 11a, 11b and 11c. For sales effected in 2025 there was also a transition rule: “You are not required to report basis information” in boxes 1d, 1g, 1h, 1i, 2 and 6, though a broker could still fill them in.

Where the amounts go on your return

Neither box is entered on its own line. They travel with the sale. For wash sales, Publication 550 says: “Report a wash sale transaction in Part I or Part II of Form 8949 with the appropriate box checked.” “Enter as a positive number in column (g) the amount of the loss not allowed.” The form’s own checkbox box tells you which part and box applies: “Indicates where to report this transaction on Form 8949 and Schedule D (Form 1040), and which checkbox is applicable.” Start with Form 8949 and Schedule D for the layout of those forms.

Edition and box numbers

The primary read for this page is the 2025 edition of Form 1099-DA with its Instructions for Recipient, which is the form sent in early 2026 for tax year 2025, together with the 2025 Instructions for Form 1099-DA that the broker follows. The 2026 edition was the one irs.gov served as current on 2026-10-17, so both were read and compared.

The recipient instructions for box 1h and box 1i read the same in both editions; the two extractions were compared word for word. The form’s own label for box 1i changed from “Wash sales loss disallowed” to “Wash sale loss disallowed”, and the broker instructions date their Alex example to “In September 2026, your customer Alex buys” where the 2025 edition said “In September 2025, your customer Alex buys”. The 2026 recipient instructions add a note: “Boxes 1d, 1e, 1g, 1h, 1i, 2, 3a, 3b, 5, 6, 8, 9, 12a, and 12b may be blank if the broker is reporting sales of qualifying stablecoins or specified NFTs using an optional reporting method.”

Box numbers can stay the same while the wording around them moves, so check the tax year printed on the form you actually received before relying on any description here.

Common mistakes

  • Reading a blank box 1i as proof that no loss was disallowed. The broker instructions say it is only “permitted, but are not required, to report in box 1i any other loss”, and Publication 550 says “you cannot deduct a loss from a wash sale even if it is not reported on Form 1099-B.”
  • Treating a box 1i amount as a lost deduction. The broker is told to “Increase the adjusted basis of the acquired digital asset by the amount of the disallowed loss reported in box 1i.”
  • Expecting box 1h or 1i to be filled whenever you sold crypto. The recipient instructions limit them to assets that are “also debt instruments for tax purposes” or “also stock or securities for tax purposes”, and box 9 can leave them empty.

Related: Form 8949, does the wash sale rule apply to crypto, Form 1099-B box 1g, and market discount on Form 1099-INT.

Sources

Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.

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