Crypto Taxes 2025: The Right Ingredients for Reporting Gains

From cost basis to exchange records, here’s how to mix the right data and timing for a smoother 2025 filing season.

Crypto is no longer the wild west for reporting; the rules have caught up. If you hold, trade, or receive digital assets, a handful of practical changes in 2025 mean more information will flow to the IRS, and you’ll want your records in order. Many investors now use crypto tax software to consolidate records before filing.

What changed on January 1, 2025

Exchanges and brokers now must report gross proceeds from digital-asset sales on Form 1099-DA.

In short, more transaction details will be shared with the IRS than in prior years, so mismatches between your records and what exchanges report will stick out. (See the IRS Form 1099-DA guidance: https://www.irs.gov/forms-pubs/about-form-1099-da and instructions at https://www.irs.gov/instructions/i1099da .)

How crypto is taxed (plain language)

For tax purposes, most digital assets are treated like property, not currency. That means when you sell, trade, or use crypto, you may have a capital gain or loss. These go on Form 8949 and are summarized on Schedule D. The single number that matters most: cost basis —the amount you paid (plus fees) compared with what you received when you disposed of the asset. The IRS Form 8949 instructions explain the mechanics: https://www.irs.gov/forms-pubs/about-form-8949 and https://www.irs.gov/pub/irs-pdf/i8949.pdf

Cost-basis headaches (and how to tame them)

When you move tokens between wallets and exchanges, cost basis can become messy. The IRS issued Revenue Procedure 2024-28, which describes acceptable methods for allocating basis across accounts and the documentation it expects if you reconstruct missing records. If you’re missing history, reconstruction is possible, but it needs a defensible method and time. (Revenue procedure: https://www.irs.gov/pub/irs-drop/rp-24-28.pdf .)

Temporary relief for brokers — what it actually means

The IRS’s limited transition relief is aimed at brokers and exchanges as they update their reporting systems to comply with the new Form 1099-DA requirements; it does not change what individual taxpayers must do. You still need to keep accurate records, reconstruct basis when necessary, and report gains, losses, and any ordinary income on your tax return, so don’t treat the broker relief as permission to delay your own bookkeeping. (See the notice and IRS summary: https://www.irs.gov/pub/irs-drop/n-24-56.pdf and https://www.irs.gov/newsroom/irs-provides-additional-transition-relief-for-brokers-who-are-required-to-file-information-returns-and-backup-withhold-on-certain-digital-asset-sales .)

Investor takeaway: Broker relief ≠ taxpayer relief. Keep full transaction histories, fee details, and receipts; don’t wait to reconstruct records until tax season.

Enforcement is getting sharper

The IRS and TIGTA have both increased their focus on virtual currency reporting, making underreported gains more likely to be caught. Reliable records and clear documentation are now part of smart risk management. (TIGTA review: https://www.tigta.gov/reports/audit/virtual-currency-tax-compliance-enforcement-can-be-improved .)

Other taxable events to watch

Some crypto receipts are taxed as ordinary income the moment you gain “dominion and control”; in other words, when you can sell, transfer, or otherwise use the tokens.

Brief examples: airdrops (free tokens sent to your wallet), fork-related assets (new coins credited to holders after a blockchain split), and staking rewards (tokens you earn for validating or locking crypto).

See the IRS FAQs on virtual currency and Revenue Ruling 2019-24 for details and examples. (IRS FAQs: https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions; RR 2019-24: https://www.irs.gov/pub/irs-drop/rr-19-24.pdf .)

Quick, practical steps you can take now

• Export full transaction histories (all exchanges + wallets). Include timestamps, fees, and memo fields.
• Keep receipts or notes that explain why tokens were received (payment for services, airdrop, gift, etc.).
• Preserve records of transfers between your own wallets/exchanges so they’re not mistaken for taxable sales.
• If records are incomplete, start reconstructing them now — don’t wait for tax season. Have a clear, repeatable method you can explain if needed.
• Consider crypto tax software to aggregate, categorize, and calculate gains, losses, and income across exchanges, wallets, and DeFi. It saves time and reduces manual tracking errors.

Examples clients often use: Koinly and CoinTracking. (No affiliation; choose what fits your situation.)

When comparing tools, look for reliable exchange/wallet integrations, clear transfer matching, Form 8949 exports, and an audit trail of edits.

How Wilke CPAs & Advisors can help

We reconcile exchange and wallet histories, reconstruct cost basis, and prepare filing-ready documentation so you’re not guessing at numbers come April 2026. If you’d like a records check before you file, contact us to schedule a consultation.

This article summarizes public guidance and links to the IRS and related materials. It’s intended to inform — not replace — tailored tax advice. For questions specific to your situation, please consult a qualified tax professional.