IRS Delays Bitcoin Cost-Basis Reporting Rules Until 2026
The U.S. Internal Revenue Service announced that it has delayed new bitcoin tax reporting rules until early 2026. This extension provides brokers with additional time to adjust to the cost basis regulations for centralized platforms.
- The Internal Revenue Service (IRS) has provided a temporary break for bitcoin and other cryptocurrency investors by delaying new reporting rules that would have required a default accounting method for trades on centralized exchanges.
"The Treasury Department and the IRS understand that some digital asset brokers may not have in place, by January 1, 2025, the technology needed to accept specific instructions or standing orders communicated by taxpayers. These technology limitations may leave some taxpayers unable to make adequate identifications in conformity with § 1.1012-1(j)(3)(ii)," said the agency.
- In July, the IRS and Treasury Department introduced rules to determine which cryptocurrency units are sold in brokerage accounts using wallet-by-wallet accounting. If no accounting method is chosen, the First-In, First-Out (FIFO) method will apply, selling the earliest acquired assets first, which may lead to higher taxable gains during market upswings.
- The extension will be in effect until December 31, 2025, giving brokers more time to adapt to different accounting methods.
- During the relief period, taxpayers can use methods like Highest In, First Out (HIFO) or Specific Identification (Spec ID) to choose assets to sell, enhancing flexibility and potentially reducing tax impact.
Learn more about the IRS 'Safe Harbor' and 2026 crypto tax reporting updates here.
IRS Notice
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