Crypto Loss Harvesting & 2025 Basis Rules — A Simple Guide

ChatGPT Image Nov 21, 2025 at 10_00_09 AM

Crypto Loss Harvesting & 2025 Basis Rules — A Simple Guide

What you need to know to stay compliant and save on taxes.

byMinutes Crypto/November 21, 2025/inCrypto Blog

1. Why Loss Harvesting Matters

When crypto prices drop, you have a chance to use the dip to your advantage.
You can sell only the coins or tokens that are currently at a loss, realize that loss for tax purposes, and then buy back the same asset if you want to keep your position.

To do this correctly:

You must choose which exact units you are selling
You must record that choice before you sell
You need to save proof of how you made the decision

This protects you during an audit and ensures the IRS agrees with your calculation.

2. The Key Idea: Sell Only the Loss Lots

Every crypto purchase creates a “lot.”
Some lots may be in profit, others in loss.

To harvest losses:

You want to sell only the lots that are actually in the red
You do not want the system to default to FIFO, because FIFO may accidentally sell profitable units
You must tell your exchange — or document yourself — which lots you’re selling

This is called specific identification.

3. What Counts as Proper Identification

Before you sell, you simply need a record that clearly says:

Which units you plan to sell
What their cost was
When you acquired them
And that you chose these units before the trade happened

Think of it as leaving a paper trail for your future self.

4. How to Document It

A. If You’re Selling on an Exchange

If the exchange supports lot selection, do the following:

Select the specific lots you want to sell using the exchange interface
Take a screenshot before submitting the order
Save the trade confirmation
Export the basis report afterward

If the exchange does not support lot selection, simply record it yourself.

B. If You’re Selling From a Wallet (Self-Custody)

Because there is no broker, you document it yourself.
This can be extremely simple:

Email to yourself
A note in your Notes app
A Google Doc
A PDF or screenshot with a date stamp

Example entry:

“Today I am selling 2.3 ETH bought on March 12, 2022 for $2,900 each from wallet 0xABC… . These are the units designated for sale.”

Save it in any system that naturally timestamps changes.

That’s it.
That’s enough to show intent and timing if anyone ever asks.

Using MinutesCrypto.com

MinutesCrypto helps by:

Showing all your wallet and exchange inventories
Listing every lot with its basis
Auto-generating pre-sale documentation
Keeping everything timestamped and audit-ready

This makes the whole process much easier.

5. Big Change for 2025: No More Universal Basis Pool

Starting in 2025, crypto basis must be tracked separately for each wallet or account.
Everything becomes “account-by-account” instead of one big pool.

Here’s what that means:

Every exchange account is its own basis bucket
Every self-custody wallet address is its own basis bucket
You can no longer mix basis across wallets automatically
Transfers are treated like moving assets between separate accounts, not blending them

For many users, this is the biggest shift in the new rules.

6. Good News: You Get a One-Time Chance to Organize Everything on January 1, 2025

On that one day (“Day 1”), you can decide:

Which self-custody addresses are grouped together
Whether to keep everything separate
Whether to create custom clusters or buckets
How granular you want your tracking to be

You have complete flexibility.

This is especially helpful if you have many old wallets, multiple exchanges, or lots of historical movement.

7. After January 1 — The Structure Becomes Permanent

After your initial setup, the rules “lock in”:

Addresses stay in the bucket you assigned them
You cannot reassign or change groupings later
Only the assets can move between buckets
Moving assets requires an actual blockchain transfer

Think of it like opening several brokerage accounts:
You can’t rename accounts later, but you can move money between them.

8. What You Must Do on January 1, 2025

Here is the simple checklist:

A. Record Your Full Inventory

What you own on each exchange
What you own in each wallet
Lot-level basis and acquisition dates
Total units in each place

B. Decide Your Buckets/Clusters

Group addresses as you like
Or keep everything separate
This is your one-time design choice

C. Lock It In

After this point:

Addresses are permanently tied to their buckets
Future transfers move assets and basis, not addresses

D. Use MinutesCrypto to Generate Your Basis Assignment Report

MinutesCrypto automatically creates:

- Bucket inventories
- Basis summaries
- Timestamped files
- Audit-ready documentation

9. Loss Harvesting Checklist

Here’s a simple version clients love:

Step 1 — Look for losing lots

MinutesCrypto can highlight these.

Step 2 — Decide which ones you want to sell

Keep all the winners untouched.

Step 3 — Document your selection (before selling)

Just a timestamped note or screenshot.

Step 4 — Execute the sale

Sell only those specific lots.

Step 5 — Rebuy if desired

Crypto currently has no wash-sale rule.

Step 6 — Save your documentation

You’ll thank yourself later.

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

Interested in crypto accounting? Minutes Crypto Calculator serves as a comprehensive digital asset tax and accounting system, providing automated transaction classification, real-time portfolio tracking, and precise capital gains and losses reporting.

We are also opening two opportunities:

• The First One Hundred Impactful Users Program
Be among the first one hundred users who help shape the future of Minutes. You’ll receive early feature access, direct influence on the product roadmap, and priority support as we refine the platform for professionals and everyday investors.

• Upcoming Professional Seminars on the New Crypto Rules
We will soon be hosting seminars that break down the latest IRS and global crypto regulatory changes for accountants, tax experts, finance teams and crypto-active professionals. Everyone is welcome. If you’d like to attend, simply sign up so we know you’re interested.

🔗 Sign up here to join the first hundred

Generate your crypto tax reports with Minutes Crypto.

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.

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Crypto Loss Harvesting & 2025 Basis Rules — A Simple Guide

1. Why Loss Harvesting Matters

2. The Key Idea: Sell Only the Loss Lots

3. What Counts as Proper Identification

4. How to Document It

A. If You’re Selling on an Exchange

B. If You’re Selling From a Wallet (Self-Custody)

Using MinutesCrypto.com

5. Big Change for 2025: No More Universal Basis Pool

6. Good News: You Get a One-Time Chance to Organize Everything on January 1, 2025

7. After January 1 — The Structure Becomes Permanent

8. What You Must Do on January 1, 2025

A. Record Your Full Inventory

B. Decide Your Buckets/Clusters

C. Lock It In

D. Use MinutesCrypto to Generate Your Basis Assignment Report

9. Loss Harvesting Checklist

Step 1 — Look for losing lots

Step 2 — Decide which ones you want to sell

Step 3 — Document your selection (before selling)

Step 4 — Execute the sale

Step 5 — Rebuy if desired

Step 6 — Save your documentation

Disclaimer

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