Crypto for Advisors: Digital Asset Tax Preparation
0An introduction to managing crypto taxes to avoid a year-around challenge.
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In today’s Crypto for Advisors, Bryan Courchesne from DAIM provides information on tax planning for crypto trades. Although we are half a year away from tax season, there are many considerations to track in order to be tax-ready.
Then, Saim Akif from Akif CPA breaks down the differences in tax treatment between crypto and equities/bonds in Ask an Expert.
As advisors focused on crypto, we’re familiar with the unique tax situations this asset class presents. For example, crypto is not subject to wash-sale rules, which allows for more efficient tax-loss harvesting. It also enables direct asset swaps, such as converting bitcoin (BTC) to ether (ETH) or ETH to Solana (SOL), without first selling into cash. These are just a couple of features that set crypto apart from traditional investments.
However, perhaps the most important thing for investors to consider is the sheer number of platforms they may use and how challenging it can be to track everything at tax time.
Tracking your crypto taxes isn’t just a year-end chore; it’s a year-round challenge, especially if you’re active on multiple centralized exchanges (CEXs) or decentralized platforms (DEXs). Every trade, swap, airdrop, staking reward, or bridging event can be a taxable event.
Centralized Exchange Trading
When using CEXs like Coinbase, Binance, or Kraken, you may receive year-end tax summaries, but those are often incomplete or inconsistent across platforms. One major challenge is tracking your cost basis across exchanges.
For example, if you buy Amazon stock in a Fidelity account and transfer it to Schwab, your cost basis transfers seamlessly and updates with each new trade. At tax time, Schwab can generate an accurate 1099 showing your gains and losses.
But in crypto, if you transfer assets from Kraken to Coinbase, your cost basis doesn’t automatically transfer with them. If you’re moving assets across multiple platforms, you’ll need to manually track every transaction, or you’ll face a major headache when filing taxes.
Decentralized Exchange Trading
Things get even more complicated when using DEXs. Apps like Coinbase Wallet (not to be confused with the Coinbase exchange) or Phantom connect you to decentralized trading platforms like Uniswap or Jupiter. These DEXs don’t issue tax forms or track your cost basis, so it’s entirely up to you to log and reconcile every transaction.
Miss a single token swap or forget to record the fair market value of a liquidity pool withdrawal, and your tax report could be inaccurate. That could trigger IRS scrutiny or lead to missed deductions. While some apps can calculate gains and losses from a single wallet address, they often struggle when assets are transferred between addresses, making them less useful for active users.
And here’s the kicker: if you’re actively trading on DEXs, chances are you’re not even making money. But even losses must be reported correctly to qualify for a deduction. If not, you risk losing the write-off or, worse, facing an audit.
Unless you’re a full-time crypto trader, the time and effort required to track every transaction isn’t just stressful, it can cost you real money.
What steps can I take to make sure I'm tax...
https://www.coindesk.com/coindesk-indices/2025/06/18/crypto-for-advisors-digital-asset-tax-preparation
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