Almost everything that decides a digital asset tax outcome happens before the return exists. The records get made, or they do not, at the moment of the transaction. By filing season the facts are fixed and the only remaining question is how expensive it will be to prove them.
Full guide: Crypto Taxes.
Something changed that makes this sharper than it used to be. Basis reporting by brokers begins with transactions effected on or after 1 January 2026, so your records are about to be compared against what a third party reports about you. For years these were private numbers. They are becoming checkable.
This is where I keep what I know about reporting and planning for digital assets: what the rules actually require, what the records have to prove, and where the money is won or lost.
Start here
The ground rule underneath all of it is one sentence from the IRS:
“For U.S. tax purposes, digital assets are considered property, not currency.”
Property means every disposition is its own event with its own basis, its own holding period, and its own gain.
Crypto tax planning for HNW investors is the overview, and the one to read first if you hold a substantial position.
If you are trying to fix a records problem rather than plan around one, go to How to reconstruct crypto cost basis. Reconstruction is an evidence problem rather than a math problem, and the sources have very different strength.
The rule that changed under everyone
Basis is now identified wallet by wallet rather than across everything you own.
What is specific identification for crypto? covers the mechanism and carries the most consequential live detail on this page. Notice 2026-20 extends the temporary identification relief through 31 December 2026, and that relief reaches only units held in the custody of a broker. Anyone holding their own keys never had it. The people most likely to sit on long-appreciated self-custodied positions are exactly the ones relying on a headline about an extension that was never addressed to them.
Rev. Proc. 2024-28 supplied the transition, a safe harbor for allocating unused basis to each wallet or account as of 1 January 2025.
Records
- Crypto tax records checklist. What to keep, and what each record has to prove.
- Common crypto tax record mistakes. Organized by when the mistake happens, because a record failure is almost always a failure to capture something at the only moment it was cheap.
- How to separate crypto transfers from taxable sales. Moving your own assets between your own wallets creates no gain. The chain cannot tell that apart from a sale and neither can a broker, so the burden sits entirely on your records.
By situation
- Crypto staking tax reporting. Every reward is an income event and an acquisition in the same instant. The income half gets reported and the basis half gets skipped, which is how people pay tax twice on the same value.
- Crypto tax reporting for trusts. Grantor or non-grantor decides who files, and it usually gets settled by whoever prepares the first return rather than by anyone reading the instrument.
- Crypto tax reporting for LLCs. The entity changes the filing, not the transaction-level mechanics.
- Crypto charitable giving. Giving appreciated crypto directly can avoid recognizing the gain. What sinks these gifts is procedural: above $5,000 a qualified appraisal is required, and an exchange price does not substitute for one.
- How crypto capital gains are taxed. The holding period does the heavy lifting, and the line between short-term and long-term is a year to the day. Most of the avoidable tax people pay comes from selling a few weeks early.
- How inherited crypto is taxed. Assets from a decedent take a basis equal to value at the date of death, so the built-in gain disappears. The practical failure is not tax, it is heirs who cannot reach the keys to use the step-up at all.
- Gifting crypto and gift tax. A lifetime gift carries your basis to the recipient, which is the exact opposite of what an heir receives. Giving away a low-basis coin hands over the gain along with it.
- The wash-sale rule and crypto. It does not apply under current treatment, because the rule reaches securities and the IRS treats crypto as property. Proposals to close that have appeared repeatedly, so treat it as current rather than permanent.
- Airdrops and forks. Income lands when you gain dominion and control, which can be well before you ever intended to own the token. Unwanted airdrops are the common surprise.
- Form 1099-DA. Brokers report proceeds before basis reporting fully phases in, so early forms can show a sale price with no cost attached. Reconcile it against your own records rather than assuming it is right.
- Crypto, FBAR, and FATCA. Whether crypto-only foreign accounts trigger these filings is genuinely unsettled and still moving. Positions taken quietly in past years are worth revisiting with a professional.
- Puerto Rico Act 60. The part people miss: appreciation that accrued before residency generally stays US taxable. The move changes the future, not the built-in gain.
- Choosing a crypto CPA or attorney. Verify the credential first, then ask the three questions that actually separate specialists: basis reconstruction, staking timing, and reconciling a 1099-DA that arrives without basis.
What I actually see
Records treated as a filing-season task. By the time anyone opens the folder, the transactions are years old, two exchanges have closed, and the acquisition history that was a ten-minute export at the time now costs real professional fees to rebuild.
Reporting tools configured years ago and never revisited, still pooling every wallet into one blended position. The output is clean and it answers a question that stopped being the question on 1 January 2025.
And identifications assembled at filing time. The lot selection is usually sound on the merits, and it fails anyway on timing alone, which is the part people find hardest to accept.
The check worth running
Take your most recent disposition from a wallet you control yourself. Find the block timestamp, which is public and unarguable. Then find the record identifying which units left, and check when that record was written.
If the record’s timestamp lands after the block timestamp, first-in first-out governed that sale, whatever the return says. Checking a single transaction is enough to tell you which side of this you are on.
Where this sits
Tax runs through every other layer here. Wyoming LLCs covers the entity whose filing it changes. Trusts covers the instrument with its own return and its own compressed brackets. Estate planning covers basis at death, which is where the largest single number in most of these files gets decided. Custody covers where the assets sit, which now determines which identification rules apply to you.
The failure I see most often has nothing to do with taking a wrong position on a return. It is that the attorney, the CPA, and whoever handles the custody arrangement have never compared notes, so the entity documents, the account titles, and the tax records describe three slightly different sets of assets. That disagreement used to stay private. Broker basis reporting is what ends that. If you would rather have the records and the reporting built to agree before a third party compares them for you, crypto tax support is where my firm starts.
Sources
- IRS, Digital assets
- Rev. Proc. 2024-28, basis allocation safe harbor
- Notice 2026-20, extension of temporary identification relief
- Notice 2025-7, temporary identification relief
- Rev. Rul. 2023-14, staking validation rewards
- 26 U.S.C. § 1012, basis of property
- IRS, Instructions for Form 1041, estates and trusts
Last updated: 3 August 2026. This hub indexes the tax articles published so far and grows as more are added. Tax thresholds are indexed and change annually.
This page is general education, not legal, tax, or investment advice. Tax outcomes depend on your facts and your jurisdiction. Talk to a qualified CPA about your own situation.
