I was reconciling my 1099-DA from Coinbase and my Form 8949 from Koinly, and I noticed that the proceeds for most of my transactions was slightly higher on 8949 than what is reported to me on Coinbase's 1099-DA. I realized that the amount higher was exactly the Fee amount (USD Value). So for example, the 1099-DA would show proceeds for one transaction at $994, but Koinly would show $1000. The Fee paid in this case would be $6, which is exactly the difference between Koinly's 8949 and Coinbase's 1099-DA.

Note that these transactions are usually between two cryptocurrencies or between one crypto and one stable coin (e.g. ETH -> BTC, ETH -> USDC), where Fee would be paid in BTC or USDC respectively. I do not have any transaction where I sold crypto for fiat.

I did some digging and I found this reddit post explaining some changes that were seemingly made by the IRS regarding Fees: https://www.reddit.com/r/CryptoTax/comments/1pp63fz/2025_transaction_fee_updates_explained/

It explains that the old method (what Koinly is doing) was that the Fee would be added onto the cost basis of the received crypto. If the Fee was paid for in crypto, the crypto paid as Fee would result in a separate sell entry on 8949. The lots sold for the fee would be determined using the selected cost tracking method (e.g., FIFO). So for example if you exchange ETH for BTC, and paid 0.001 BTC as fee worth $60, the cost basis of the BTC received would be adjusted such that it is $60 higher. Then the 0.001 BTC sold as fee would be another line entry on 8949 that pulls from your available BTC lots using FIFO (or whatever cost tracking you selected). Thus, the fee disposal could result in another gain/loss.

The post claims that for 2025+, the IRS updated the Transaction Fee handling for cases were we sell a crypto and pay fee in crypto. In the updated rules, the Fee should be deducted from the Proceeds of the transaction where it was paid. Also, if the Fee was paid in the same type as the receiving crypto, it should be pulled from the same lot being received (thus 0 gain and no separate 8949 line entry). So with the above example, the 0.001 BTC ($60) paid as fee, would be reduced from the proceeds of the ETH disposal. Internally, Koinly will also reduce the amount from the BTC acquired by 0.001 BTC. No separate 8949 is required for this since gain/loss would always be 0 (it is considered disposed in the same lot that was received).

The reddit post also links to an IRS .gov website outlining the full legal regulations (https://www.federalregister.gov/documents/2024/07/09/2024-14004/gross-proceeds-and-basis-reporting-by-brokers-and-determination-of-amount-realized-and-basis-for). This is from 2024 and is quite long and hard to read. But I used AI to analyze it and it confirmed the changes described here are correct. The document also describes in several places that the changes are to take effect in 2025+ (e.g., "This section applies to all sales, exchanges, and dispositions of digital assets on or after January 1, 2025").