Here is a question recently asked about a local small business using web3 assets for marketing purposes in its local market:

If a local business utilizes digital assets in its marketing, such as virtual land and augmented reality + things like web3 domains (and web3 websites) and minting NFTs or Proof of Attendance Protocol (POAP) NFTs to give away to customers and prospective local customers, is there any 1099-DA form likely to be generated? To confirm, there is no trading of cryptocurrency or investing in it for long-term or shorter-term speculative purposes by the business nor its employees. Typically 1099-DA forms get issued by those trading on exchanges like Coinbase, but those are usually for those investing and speculating in cryptocurrencies and altcoins. In this case the local business is creating and giving away web3 assets for marketing purposes.

This is a tough question to answer, so the AI answer appears in a moment. If, however, you want to talk with a CPA who understands cryptocurrency and digital asset taxable events then consider watching the video below and contacting his firm.

Here is the answer from the AI results for the above question:

Here’s the clearest answer based on current IRS rules and guidance (as of early 2026):

🧾 What Form 1099-DA Is

Form 1099-DA is a new IRS information return that U.S. brokers must issue to report digital asset sales and dispositions they facilitate for customers. That includes things like selling crypto or NFTs through a custodial platform or exchange. The form reports gross proceeds from dispositions so the IRS gets a paper trail of reportable transactions. (IRS)

📍 When a 1099-DA Is Issued

You’ll generally get a 1099-DA if you transact with a brokers (e.g., a U.S. centralized exchange or similar service) that sells or exchanges digital assets on your behalf — such as converting crypto for cash, trading one token for another, or selling NFTs with proceeds going back to you. (IRS)

📌 Does Your Business Get a 1099-DA for Marketing NFTs or Web3 Giveaways?

Likely not. Here’s why:

1. The form is about brokered dispositions
1099-DA is triggered when a broker reports the sale or exchange of digital assets on behalf of a customer. If your business creates and gives away digital assets (like NFTs, POAPs, or web3 domains) as part of a marketing campaign — and you aren’t using a broker to sell/exchange them for money or other property on your behalf — then no broker-issued 1099-DA would arise simply from the giveaway itself. (IRS)

2. No sale or exchange through a broker = no 1099-DA
Giving away digital assets isn’t a brokered transaction; it’s more akin to issuing rewards or promotional items. In tax terms, those assets might have value that creates income for the recipient (the person getting the NFT), but the business giving them away wouldn’t receive a 1099-DA for that marketing activity. (IRS)

3. Your use case isn’t speculation or trading
The common issuance of 1099-DA you’re familiar with — like from Coinbase — is because people are trading or selling digital assets on exchange platforms. That’s different from creating digital assets for marketing and distributing them without a sale or broker facilitation. (Koinly)

🤔 But What About the Tax Implications?

Even if your business doesn’t receive a 1099-DA, there may still be tax reporting requirements:

• For the business giving away NFTs/web3 assets:

  • You may need to report the fair market value of the assets given as ordinary business expenses or promotional costs. (This is separate from whether a 1099-DA is issued.)

  • The IRS treats digital assets as property for tax purposes, so issuing them can have tax implications for the recipient — especially if there’s a determinable value when they receive or later dispose of them. (IRS)

• For the recipients:

  • People who receive these assets could have an income event depending on value and use — but that’s a separate question from your business’s 1099 reporting. (IRS)

📍 Key Takeaway

• Your business is unlikely to receive a 1099-DA just for distributing NFTs/POAPs/web3 domains as marketing rewards.

• 1099-DA is generally issued by brokers for reportable sales or exchanges of digital assets they facilitate. (IRS)

🧠 Important Note

Tax law changes frequently, especially around digital assets. While this reflects current IRS guidance as of early 2026, it’s strongly recommended you consult a qualified tax professional or CPA to confirm how the rules apply to your exact facts and business structure — particularly because tax treatment of digital assets continues to evolve.

If you want help unpacking how giving away NFTs affects your business taxes or how to track/report that value properly, feel free to ask!

Here is a question recently asked about a local small business using web3 assets for marketing purposes in its local market:

If a local business utilizes digital assets in its marketing, such as virtual land and augmented reality + things like web3 domains (and web3 websites) and minting NFTs or Proof of Attendance Protocol (POAP) NFTs to give away to customers and prospective local customers, is there any 1099-DA form likely to be generated? To confirm, there is no trading of cryptocurrency or investing in it for long-term or shorter-term speculative purposes by the business nor its employees. Typically 1099-DA forms get issued by those trading on exchanges like Coinbase, but those are usually for those investing and speculating in cryptocurrencies and altcoins. In this case the local business is creating and giving away web3 assets for marketing purposes.

This is a tough question to answer, so the AI answer appears in a moment. If, however, you want to talk with a CPA who understands cryptocurrency and digital asset taxable events then consider watching the video below and contacting his firm.

Here is the answer from the AI results for the above question:

Here’s the clearest answer based on current IRS rules and guidance (as of early 2026):

🧾 What Form 1099-DA Is

Form 1099-DA is a new IRS information return that U.S. brokers must issue to report digital asset sales and dispositions they facilitate for customers. That includes things like selling crypto or NFTs through a custodial platform or exchange. The form reports gross proceeds from dispositions so the IRS gets a paper trail of reportable transactions. (IRS)

📍 When a 1099-DA Is Issued

You’ll generally get a 1099-DA if you transact with a brokers (e.g., a U.S. centralized exchange or similar service) that sells or exchanges digital assets on your behalf — such as converting crypto for cash, trading one token for another, or selling NFTs with proceeds going back to you. (IRS)

📌 Does Your Business Get a 1099-DA for Marketing NFTs or Web3 Giveaways?

Likely not. Here’s why:

1. The form is about brokered dispositions
1099-DA is triggered when a broker reports the sale or exchange of digital assets on behalf of a customer. If your business creates and gives away digital assets (like NFTs, POAPs, or web3 domains) as part of a marketing campaign — and you aren’t using a broker to sell/exchange them for money or other property on your behalf — then no broker-issued 1099-DA would arise simply from the giveaway itself. (IRS)

2. No sale or exchange through a broker = no 1099-DA
Giving away digital assets isn’t a brokered transaction; it’s more akin to issuing rewards or promotional items. In tax terms, those assets might have value that creates income for the recipient (the person getting the NFT), but the business giving them away wouldn’t receive a 1099-DA for that marketing activity. (IRS)

3. Your use case isn’t speculation or trading
The common issuance of 1099-DA you’re familiar with — like from Coinbase — is because people are trading or selling digital assets on exchange platforms. That’s different from creating digital assets for marketing and distributing them without a sale or broker facilitation. (Koinly)

🤔 But What About the Tax Implications?

Even if your business doesn’t receive a 1099-DA, there may still be tax reporting requirements:

• For the business giving away NFTs/web3 assets:

  • You may need to report the fair market value of the assets given as ordinary business expenses or promotional costs. (This is separate from whether a 1099-DA is issued.)

  • The IRS treats digital assets as property for tax purposes, so issuing them can have tax implications for the recipient — especially if there’s a determinable value when they receive or later dispose of them. (IRS)

• For the recipients:

  • People who receive these assets could have an income event depending on value and use — but that’s a separate question from your business’s 1099 reporting. (IRS)

📍 Key Takeaway

• Your business is unlikely to receive a 1099-DA just for distributing NFTs/POAPs/web3 domains as marketing rewards.

• 1099-DA is generally issued by brokers for reportable sales or exchanges of digital assets they facilitate. (IRS)

🧠 Important Note

Tax law changes frequently, especially around digital assets. While this reflects current IRS guidance as of early 2026, it’s strongly recommended you consult a qualified tax professional or CPA to confirm how the rules apply to your exact facts and business structure — particularly because tax treatment of digital assets continues to evolve.

If you want help unpacking how giving away NFTs affects your business taxes or how to track/report that value properly, feel free to ask!