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The IRS has delayed the enforcement of new cryptocurrency cost-basis reporting requirements to next year, allowing brokers additional time to adapt to the new reporting rules.
What’s The Scoop?
- New Deadline Announced: The IRS announced that they are postponing the new tax reporting methods for cryptocurrencies until the beginning of 2026.
- Necessary Delay: Users selling assets held on CeFi exchanges that did not specify a preferred accounting method would default automatically to First-in, First-out (FIFO) but many exchanges aren't set up for this yet so crypto holders with alternative preferences would have been out-of-luck.
Bankless Take:
The crypto space moves very fast and it can be a tricky place to keep track of capital gains when swapping from one token to another. Hopefully, this delay will allow brokers and crypto platforms time to establish a system for accurate tax reporting. It will also be interesting to see whether the IRS will change crypto tax reporting rules as the space continues to evolve, putting investors in another tough position navigating new tax regulations.
2/ Now, there was a practical problem with this approach.
— Shehan (@TheCryptoCPA) December 31, 2024
Almost all CeFi brokers were not ready to support Spec ID as of 1/1/25.
🚨This meant that you had no option other than selling your CeFi assets under FIFO starting 1/1/25.
In a bull market environment, this could have…
