An exit plan is the set of conditions that must be true before a sale is executable at all, and none of them requires a view on price. My view is that timing absorbs nearly all the attention and causes almost none of the failures. The exits I have watched go badly went badly because nobody could prove basis, produce an authorized signer, or name the account receiving the money.
Part of our guide: Family Office.
The short version
- Proof of what you own and what it cost has to satisfy a reader with no reason to believe you, because the venue, the bank, and the return each ask separately.
- The registered owner and the person who can sign are two different facts, reconciled on paper before an order exists.
- A receiving account that already knows what is coming, since holding an account and holding one that can accept the proceeds are separate questions.
- The tax figure gets computed before the money moves, and the installment it falls into carries a due date of its own.
- Every restriction gets read in the original, since vesting schedules, lock-ups, and transfer clauses bind regardless of anything else here.
Start with what the proceeds are for
An exit converts a holding into something else, and until that something else is named, the size and the sequence are arbitrary. The purposes I see are concrete: a liability with a due date, a purchase with a closing, funding an entity or a trust, or reducing one position’s share of a balance sheet. Some are served without a disposition at all, which is why borrowing against a position compared with selling carries its own risks and its own analysis. I am not going to tell you when to sell, or whether to. Five conditions decide whether any disposition is executable, and each is verified by producing something to a third party who has no reason to take your word for it.
Two of them are simple to state and routinely skipped. Restrictions bind independent of everything else here, so a vesting schedule, a lock-up, or a transfer clause can close an option outright, and each is read in the original (lock-up review, planning before an unlock). A bank told in advance what is arriving also sits in a very different position from one that finds out on the day, and the urge to split a large amount so it draws less notice is conduct 31 U.S.C. § 5324 makes a federal crime in its own right.
Proof that survives a stranger reading it
Gain is computed from two numbers, and you supply one of them:
“The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain …”
Amount realized falls out of the transaction. Adjusted basis comes from your file. The IRS treats digital assets as property for federal tax purposes and requires records sufficient to establish the positions taken on a return (IRS, Digital assets), and Form 8949 asks for that history line by line: what was acquired, when, at what cost, and for what proceeds. Three readers ask for that file in three vocabularies: the return, the venue’s compliance desk, and the receiving bank.
Basis is positional now. Since 1 January 2025 it has been tracked location by location under Rev. Proc. 2024-28, so one asset bought at two prices in two wallets produces two tables, and a blended figure across everything you hold describes nothing reportable. Crypto tax planning covers those identification rules. The point here is that the number is knowable well before an order exists, and record mistakes usually explain the holes.
The owner and the signer are one arrangement
Title records who owns the coins. Who may sign an order to sell them is a separate fact from a different document. Inside an LLC that authority lives in the operating agreement, and where the agreement is silent, state defaults decide. Wyoming’s surprise people who assume a manager’s title settles it:
“In a manager-managed limited liability company, unless the articles of organization or the operating agreement provide otherwise … The consent of all members is required to: (A) Sell, lease, exchange or otherwise dispose of all, or substantially all, of the company’s property … outside the ordinary course of the company’s activities”
Wyo. Stat. § 17-29-407(c), Wyoming Legislature
Two phrases carry the weight. “Substantially all” is easy to reach inside an entity formed to hold one asset. “Outside the ordinary course of the company’s activities” is decided by what the operating agreement says the company does, which is why a general-purpose template behaves differently from a holding-entity one. Member-managed companies land nearby, since an act outside the ordinary course requires the consent of all members there too (§ 17-29-407(b)(iv)).
A trust runs the same logic through a different instrument. A trustee’s power to dispose of a particular asset comes from the trust document and the governing trust code, and a retention direction can close the option (can a trustee sell crypto held in a trust). Then comes the layer no drafted document mentions: the custodian’s own record of authorized persons (custody, whether the entity can own the wallet).
The tax figure carries a due date of its own
Modeling the liability before the money moves is the step everyone agrees with and most people postpone, and it matters because of a deadline that lands well before the return. Gains from a self-directed disposition generally arrive with no withholding, which puts them inside the estimated tax system section 6654 polices. That section requires four installments a year and runs the period of any underpayment “from the due date for the installment” until the portion is paid or the 15th day of the 4th month after the tax year closes, whichever comes first (26 U.S.C. § 6654).
A gain realized in the second quarter therefore creates an obligation dated in the second quarter, and finding out the following April does not move the date it was owed. Safe harbors measured against the current year’s tax and the prior year’s exist, with a higher bar for higher-income filers, and they are worth settling with a CPA before an order is placed.
What I actually see
Three patterns account for most of the avoidable damage.
The manager who assumed the title was the authority. A single-asset LLC, an operating agreement pulled from a template, and a manager who signs for a disposition covering most of what the company owns. The trade clears. What survives it is a governance defect, and the first person to read the document carefully is usually the member who was never asked.
Two answers to who owns this. Holdings reported at the entity level while the venue account is verified in an individual’s name, or the reverse. Nobody notices while deposits are small. The compliance desk notices at the size that matters, asks whose account receives the proceeds, and the plan stops there for weeks.
The plan whose only variable was price. A careful model, tranches laid out against levels, and nothing about who signs, where the fiat lands, or what the liability comes to. Rebuilding the model takes an afternoon. Rebuilding what it assumed takes months.
Run this as a dry run this week, with nothing pending. Write the order you would place on your largest position: the units, the account placing it, the account the fiat lands in, and a date. Then collect four documents: the acquisition record for those units, the page authorizing that person to sell them, a statement showing the receiving account in the same name, and one page of arithmetic giving amount realized minus adjusted basis. Anything taking more than a day to produce is a condition that is not yet true, found while nothing depends on it.
Where this goes wrong
The damage concentrates in plans assembled entirely out of the parts the holder controls.
An operating agreement never read past the signature page, so a default rule that has governed for years gets discovered mid-transaction. A trustee named in an instrument granting no power over an asset of this kind. A receiving account opened the week of the sale, in a name that does not match the seller, at an institution told nothing beforehand. An entity account whose verified control person resigned two years ago. A lock-up read in summary, so a transfer restriction surfaces after an order is live. And the costliest version: an exit executed correctly in every operational respect and reported nine months later by somebody reconstructing lots from a balance.
The decision rule
- Name what the proceeds are for before naming any amount, since the purpose fixes the size and the deadline.
- Assemble the acquisition record for the specific units you would sell, wallet by wallet, before any modeling starts.
- Read the governing document to the end and find the clause authorizing a disposition of this size, or the default rule that applies because no clause does.
- Reconcile the three names, so the registered owner, the venue’s verified account holder, and the receiving bank account agree.
- Open and disclose the receiving account ahead of the transaction, describing the source of funds while nothing is pending.
- Compute amount realized minus adjusted basis on paper, then find the installment date the liability falls into.
- Read every restriction in the original, vesting schedules, lock-ups, and transfer clauses included.
- Run the sequence as a dry run with no order placed, and fix whatever took longest to produce.
Where this sits
This article sits above two that carry the work forward. Token liquidity event planning covers the event itself once these conditions hold, and OTC block trade liquidity covers execution: the venue, the counterparty, and how a large order reaches a market. Underneath all three sit the ownership questions that decide who can act, in Wyoming LLCs, trusts, and estate. Concentration risk covers the measurement that opens the conversation. Start with whichever of the five conditions you cannot currently evidence.
These questions cross professional boundaries, and the join is where they break. The attorney who drafted the operating agreement priced the risk of a dispute among members and never pictured a disposition at a trading venue. The CPA modeling the liability works from the holdings described to them and sees nothing about who may sign. The custodian keeps a record of authorized persons and no copy of the document that created the authority. All five conditions live in the gaps between the three, which is why nothing tests them until a transaction does.
Sources
- 26 U.S.C. § 1001, Determination of amount of and recognition of gain or loss (Cornell LII)
- 26 U.S.C. § 6654, Failure by individual to pay estimated income tax (Cornell LII)
- 31 U.S.C. § 5324, Structuring transactions to evade reporting requirement prohibited (Cornell LII)
- Wyoming Limited Liability Company Act, Wyo. Stat. Ann. Title 17, Chapter 29 (Wyoming Legislature)
- IRS, Digital assets
- IRS, About Form 8949, Sales and other Dispositions of Capital Assets
- IRS, Rev. Proc. 2024-28, basis allocation to wallets
Related
- Token liquidity event planning
- OTC block trade liquidity for large token positions
- Crypto tax planning for HNW investors
- Should crypto be held personally, in an LLC, or in a trust?
- Crypto concentration risk management
- Founder and token holder wealth
Last updated: 3 August 2026. Estimated tax installment dates and safe harbor thresholds are set by statute and change with the tax year.
This article is general education, not legal, tax, or investment advice. Nothing here is a recommendation to buy, sell, or hold any asset, and it takes no position on when or whether any disposition should occur. Outcomes depend on your governing documents, your records, your custody arrangements, and your state. Talk to a qualified attorney and CPA about your own situation.
