Crypto Basis Rules Are Changing

💰 Crypto Basis Rules Are Changing, What You Need to Know for 2025 & Beyond

Based on IRS Final Regulations (T.D. 9990), Rev. Proc. 2024-28, and Notice 2025-7

byMinutes Crypto/November 5, 2025/inCrypto Blog

✅ What Stays the Same

🪙 Crypto = Property, Not Currency

For U.S. federal tax purposes, digital assets remain property, not money.
Sales, swaps, or spending trigger capital gain or loss—just like stocks or real estate.

📈 Gain or Loss = Sale Price − Cost Basis

Every time you dispose of crypto, you compute:

Amount realized − Cost basis = Taxable gain (or loss)

⏱️ Holding Period Still Controls Tax Rate

Hold for ≤ 1 year → Short-term (ordinary rates)
Hold for > 1 year → Long-term (capital-gains rates)
Holding periods carry over through non-taxable transfers between your own wallets or accounts.

⚠️ What’s Changing (Effective 2025 Onward)

🧩 1. Per-“Wallet” / Per-Broker Account Basis Tracking

Starting January 1, 2025, cost basis must be tracked separately for each wallet or broker account—no more “universal pooling.”
You must identify which units were sold within that specific “wallet” or broker account.

Transfers between “wallets” are nonrecognition events—basis and holding period travel with the assets. FIFO (First-In, First-Out) applies within each wallet/account unless you make a timely Specific Identification.

Regulatory Definition of “Wallet”:
In the preamble to the final regulations (T.D. 9990, Section III.C.3), the IRS clarifies: “A wallet means a set of digital asset addresses or private keys, or accounts, that a person treats as a single unit for recordkeeping purposes.”

This definition makes clear that a “wallet” is an accounting construct, not a specific blockchain address or app.

💡 Safe Harbor – Rev. Proc. 2024-28

If you used universal pooling before 2025, you may re-allocate pre-2025 “unused basis” among your wallets/accounts:

Do it once, before your first 2025 sale or your 2025 return due date.
Basis and holding periods move together.
Document how and when you completed the allocation.

(This step transitions your records into the new “wallet-by-wallet” model.)

🧾 2. New Broker Reporting — Form 1099-DA

Year	What’s Reported	Who Reports It
2025 onward	Gross proceeds from digital-asset sales/exchanges	Brokers, exchanges, custodial wallet providers
2026 onward	Cost basis + gain/loss info	Same filers

These rules mirror stock brokerage reporting.
Expect tighter IRS matching and greater emphasis on your own basis records.

🧾 3. Documentation & Lot Identification Matter More Than Ever

To use Specific Identification, you must keep contemporaneous, verifiable records:
🗓 Date / time acquired and sold
💵 Cost basis and FMV in USD
🔐 Wallet or account where held
📜 Transaction fees and disposition details

If you cannot produce this documentation, IRS rules default you to FIFO, which can increase taxable gain. (Notice 2025-7 also allows temporary flexibility in 2025 if brokers cannot yet process your standing instructions.)

🧮 What This Means for You

🏦 1. Plan for Per-“Wallet” Ledgers

Set up a cost-basis ledger for each exchange or “wallet” you use.

Each exchange account = its own “account.”
All self-custody holdings may be treated as one “wallet” (or more, if you track separately).

➡️ The “wallets” in the regulations are accounting concepts referring to groupings of holdings for basis tracking purposes.
To avoid confusion, in the Minutes accounting ledger, we call these Basis Buckets.

🛡 2. Use the Safe Harbor Before 2025

Reallocate your unused basis by Dec 31, 2024 (or before your first 2025 sale).
This locks in compliant starting balances under the new rules.

📚 3. Maintain Granular Records

Record every acquisition, transfer, and sale:

Date / Time | Cost Basis (USD) | Wallet / Account | Disposition Details | Fees

📑 4. Verify Broker 1099-DA Data

When Forms 1099-DA arrive (2025–26), reconcile:

Reported gross proceeds
Reported basis
Your own internal records

🔁 5. Document Transfers Between Wallets or Exchanges

Transfers are not taxable, but you must log them:

“2024-11-15 – Transferred 0.5 BTC from Private Wallet to Exchange A – Carryover basis $15,000, acq. date 2022-07-01.”

This ensures continuity of both basis and holding period.

We welcome your feedback, questions and ideas — comment below or email us at hello@minutescrypto.com

Minutes Crypto Calculator is a smart digital asset ledger that helps businesses classify transactions and calculate gains and losses in minutes.

Disclaimer

The information provided in this article is for general informational purposes only and does not constitute legal, accounting, or tax advice. Tax laws are complex and subject to change, and individual circumstances may vary, often resulting in different tax outcomes than those described under general rules. Readers are strongly encouraged to consult a qualified tax professional or advisor to obtain advice specific to their personal situation. The author and publisher assume no responsibility for any errors, omissions, or outcomes resulting from the use of this information.

💰 Crypto Basis Rules Are Changing, What You Need to Know for 2025 & Beyond

Based on IRS Final Regulations (T.D. 9990), Rev. Proc. 2024-28, and Notice 2025-7

✅ What Stays the Same

🪙 Crypto = Property, Not Currency

📈 Gain or Loss = Sale Price − Cost Basis

⏱️ Holding Period Still Controls Tax Rate

⚠️ What’s Changing (Effective 2025 Onward)

🧩 1. Per-“Wallet” / Per-Broker Account Basis Tracking

💡 Safe Harbor – Rev. Proc. 2024-28

🧾 2. New Broker Reporting — Form 1099-DA

🧾 3. Documentation & Lot Identification Matter More Than Ever

🧮 What This Means for You

🏦 1. Plan for Per-“Wallet” Ledgers

🛡 2. Use the Safe Harbor Before 2025

📚 3. Maintain Granular Records

📑 4. Verify Broker 1099-DA Data

🔁 5. Document Transfers Between Wallets or Exchanges

Disclaimer

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