Cryptocurrency
Every wallet, every disposal, every taxable event — reconciled.
Crypto is property. Each trade, staking reward, mining payout, and airdrop is a tax event — and the IRS wants lot-level detail. We build books that survive 1099-DA reconciliation, cost-basis audits, and exchange onboarding, so you're not reconstructing two years of history under deadline.
Why crypto books break standard accounting
Crypto is property. Every disposal is a gain or loss.
Cryptocurrency is not currency for tax purposes — it's property. That changes everything about how you track, recognize, and report it.
Cost-basis tracking at lot level
Each acquisition — purchase, mining payout, staking reward, airdrop — creates a new lot with its own basis and holding period. Without lot-level records, the IRS defaults you to FIFO and you lose the ability to optimize.
Ordinary income at receipt, capital gain on disposal
Staking rewards, mining income, and airdrops are ordinary income the moment you receive them, valued at fair market value. When you later sell or trade that same asset, a separate capital gain or loss is triggered on top.
DeFi and LP complexity
Liquidity pool deposits, yield farming, wrapping, and bridging each have their own tax treatment — some trigger disposals immediately, others create new basis tracking obligations. Standard bookkeeping software doesn't see them.
1099-DA and broker reconciliation
Exchanges now issue 1099-DAs, but coverage is incomplete and wallet-to-wallet transfers are not reported. Books that don't reconcile across all venues leave unexplained discrepancies that trigger CP2000 notices.
Where taxable events come from
Ten taxable activities, each tracked differently.
Crypto businesses and investors generate taxable events across a spectrum of activities — each with its own basis, character, and reporting obligation.
The reconciliation gap
Your exchange reports and your actual tax liability are two different numbers.
1099-DAs cover exchange-reported transactions but miss wallet-to-wallet transfers, DeFi activity, and off-exchange OTC trades. We reconcile every wallet and exchange into a single lot-level ledger — so the number on your return matches what you actually owe, not what Coinbase thinks you owe.
The crypto tax playbook
Property rules. Lot-level elections. Real differences.
Crypto taxation runs on property rules — with nuances that change the character, timing, and amount of every item on your return.
FIFO / LIFO / HIFO / Specific ID
The IRS permits multiple cost-basis methods, but you must elect and document them consistently. HIFO minimizes near-term gain; Specific ID gives maximum flexibility. Without explicit documentation, the IRS defaults to FIFO.
Short-term vs. long-term holding periods
Lots held over one year qualify for long-term capital gain rates. Lot-level tracking determines which lots to dispose of to optimize character — a decision that must be made trade-by-trade, not at year-end.
Staking, mining & airdrop recognition
These are ordinary income at receipt, not deferred until sale. The fair market value on the date of receipt is both the income recognized and the cost basis for the new lot — tracking both simultaneously is mandatory.
Wash-sale rule: currently does not apply to crypto
As property (not a security), crypto is not currently subject to the wash-sale rule — losses are deductible even if you repurchase within 30 days. However, this is subject to legislative change and should be monitored.
Trader status & mark-to-market election
High-frequency traders may qualify as traders in securities (or seek Section 475 MTM election for certain instruments), converting capital gains to ordinary income and unlocking deductions — but triggering self-employment tax. Entity choice matters.
FBAR & FATCA for foreign exchanges
Accounts on foreign exchanges may trigger FBAR (FinCEN 114) and FATCA (Form 8938) filing obligations. Penalties for non-filing are severe and apply regardless of whether a gain or loss was realized.
What we actually run for you
Every service mapped to a crypto problem.
We reconcile on-chain, off-chain, DeFi, and CEX activity into a single cost-basis ledger — matched against exchange reports and ready for 1099-DA cross-referencing every month.
The problem
Crypto tax filing & optimization
Basis method election, staking and mining income, FBAR/FATCA compliance, and Form 8949 — filed correctly the first time, with documentation to support it in an audit.
The problem
Portfolio & fund forecasting
Model realized and unrealized gain exposure, tax-loss harvesting windows, and year-end basis optimization before you execute — not after.
The problem
Data pipeline for high-volume activity
Automated ingestion from exchange APIs and on-chain data, normalized into a single schema — so your books scale with your transaction volume, not your headcount.
Raising capital, getting audited, or onboarding to an exchange?
Books that survive institutional scrutiny.
Whether you're raising a crypto fund, responding to an IRS examination, or completing exchange compliance onboarding, the underlying requirement is the same: lot-level records, reconciled and documented.
The numbers we put in front of you
Run your crypto operation on reconciliation metrics, not guesswork.
Reporting built for crypto — the KPIs that tell you where your tax liability sits, which lots to harvest, and whether your books are audit-ready.
Figures shown are illustrative.
Keep exploring
Go deeper — or just talk to us.
Related guides
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A 30-minute call. Bring your exchange list and a rough sense of transaction volume — we'll show you where your basis gaps are and what it takes to get your books audit-ready, on a free intro call.
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