Note: If your account is already configured for per-wallet or per-exchange (referred to as 'By wallet and exchange' in CTC) basis tracking, you won’t be impacted by this change.

Crypto transactions starting January 1, 2025, the IRS will no longer allow using a single, universal pool of crypto assets to track cost basis across multiple wallets or exchanges (referred to as “universal cost basis tracking” in CTC). Instead, the IRS now requires taxpayers to track cost basis on a per-wallet or per-account (referred to as 'By wallet and exchange' in CTC) basis.

Many crypto users have, until now, calculated gains and losses based on a universal pool of their crypto. With the new rule, each wallet or exchange must calculate its cost basis independently. This shift can cause discrepancies—especially if you previously relied on a universal pool and now must “break apart” that single cost-basis pool into several smaller ones.

The IRS has introduced a “safe harbor” provision (see Revenue Procedure 2024-28) to ease this transition. Under the safe harbor, taxpayers can rely on any reasonable method to reallocate unused basis across their wallets, as long as they maintain records showing how that reallocation was done and follow the timing guidelines set by the IRS.

Under the IRS rules, you must:

The IRS has also recently introduced Notice 2025-7, stating that users who have complied with the safe harbor rule can identify basis on their records rather than pre-identifying basis and reporting that to your exchange at the same time you comply with the safe harbor rule.

We’re creating an automated migration that will shift your cost basis from a universal pool into individual wallet or exchange–level pools. CTC will handle this process automatically if you’re currently using a universal cost basis so that you are fully compliant with the IRS’ new rules without lifting a finger.

Here’s some details on how we’re handling the migration:

Q1: Will my previous (pre-2025) tax reports change?

No. Your pre-2025 tax calculations and reports won’t be altered retroactively. The migration will only affect your cost basis going forward from January 1, 2025.

Q2: Do I need to do anything before the migration?

We recommend making sure your data is as accurate as possible, ideally with matched transfers between wallets/exchanges. If anything needs to be adjusted, you will still be able to edit transactions from previous years following the migration.

Q3: When will I see the new wallet-based cost basis in my account?

We will begin rolling it out around the end of January 2025. In many cases, you won’t need to take any additional action. We’ll let you know when the transition is complete so you can review the updated calculations and generate any needed reports.

Q4: Is there anything I need to file with the IRS?

No formal submission is required to “declare” your method. You just need to keep records of your basis allocation for potential IRS requests. Our migration process and downloadable reports will help you document everything.

Note: We are committed to helping you stay compliant with the IRS’s new rules and safe harbor guidelines. To ensure maximum accuracy, we recommend reviewing and reconciling your past transactions in line with these updated regulations. While our platform allows you to make changes to past years’ transactions, please be aware that any adjustments in the previous periods may require you to amend previously filed tax reports with the IRS. If you’re unsure how these changes might affect your reporting obligations, we encourage consulting a tax professional for personalized guidance.

If you have any questions or need help, we're here for you! Feel free to reach out to us via the in-app chat in the bottom-right corner or send your inquiries to [email protected].