Crypto Record Keeping: 6 Things to Settle Before the IRS Asks

Crypto Record Keeping: 6 Things to Settle Before the IRS Asks

Crypto record keeping is the difference between a return you can defend and a return you hope nobody questions. Exchanges shut down, wallets get replaced and export links expire, and the person who has to prove a cost basis three years later is usually the one who did not save the file. Settling six things now can take an afternoon, or much longer with many exchanges. Rebuilding them later can cost far more.

The six items below are a checklist, not a ranking. The one firm written up is Crypto Tax Made Easy, a New Jersey firm that lists Cryptocurrency Investors among its specialties. Crypto Tax Made Easy is a vetted Sam's List member and a paying member of our featured program; payment does not buy the language we use or its reviews. You can read how we picked this firm at the end.

1. Run a Crypto Transaction History Export From Every Exchange

Start with a crypto transaction history export from each exchange and platform you have ever used, including the ones you stopped using. Download the full history, not just the current year, and save the file as the exchange produced it, with its date in the filename.

Do this first because platforms change. Some limit how far back a report goes, some close accounts, and some are acquired or shut down and take their history with them. A file saved today is a record. A login you hope still works in three years is not.

The limitation: an export is the exchange's account of what happened. It can have gaps, mislabeled trade types or missing fee lines, so treat it as the starting point for your records and check it against your bank and wallet activity.

2. List Every Wallet Address You Control, and Which Ones Are Yours

Transfers between your own wallets are generally not sales, but the records have to show that they are yours. List each wallet address, the date you created it and what it holds, and note which exchange accounts it connects to.

The reason is matching. A withdrawal from an exchange and a deposit to a wallet are two lines in two places, and without the address list neither looks like a transfer to you. Software and preparers can mistake a transfer for a disposal, or a deposit for new income, and that changes the tax.

The limitation: a list does not prove ownership by itself. Keep what supports it, such as a screenshot of the wallet setup, a signed message where the wallet supports one, or the exchange's withdrawal confirmation.

3. Crypto Record Keeping for Cost Basis: Keep Records for Each Lot You Hold

Cost basis is what you paid, including fees, and the lot is the batch of coins you bought on one date at one price. When you sell, the amount of gain or loss depends on which lot you treat as sold, so each lot needs a date, a quantity and a basis.

Keep a running schedule: the date, the coin, the quantity, the price paid, the fees and where the coins sit today. Gifted and inherited coins have their own basis rules, so note how those arrived. Missing basis is a common reason a preparer ends up estimating.

The limitation: which lots you may treat as sold depends on the rules and the records you can show. Ask your preparer how your method is supported before the year ends, since the method may need to be set up in advance.

4. Capture the Fees, Gas and Small Transfers People Forget

The records that disappear first are the small ones. Network fees for moving coins, exchange fees on trades and the tiny transfers made to test a new address can each affect basis, proceeds or deductions, and they are rarely in the summary view.

Make sure your exports show fees as separate lines, and keep the on-chain transaction ID for wallet-to-wallet moves, since a block explorer can confirm them later. For decentralized activity, such as swaps and liquidity pools, save the transaction hashes too. A hash is the one record that does not depend on a company staying in business.

The limitation: on-chain data shows that something happened. It does not say why, so add a short note for anything unusual, such as a payment for services, a gift or a reward.

5. Decide How Long You Will Keep Crypto Audit Records

Crypto audit records have to outlast the period in which a return can be questioned. As a general matter the IRS has a limited window to assess tax after a return is filed, and that window can be longer in some situations, such as when income is substantially understated or no return is filed. Records that support basis also matter for years after you buy, because the basis is used when you sell.

A practical rule is to keep records for as long as you hold the asset and for some years after you report its sale, and to keep the return itself and supporting schedules. Store copies in two places, one of them off the device you trade from. Name files by exchange and year so an auditor, or you, can find them.

The limitation: the length of the window depends on the facts and the rules, which change. Ask your preparer how long to keep each type of record for your situation.

6. Decide Who Reconciles Your Crypto Record Keeping, and When

Records that nobody reviews are a pile. Decide who pulls the exports, who matches transfers, who checks the software's output against the exchange statements and who signs off before filing. For many people that is you, once a quarter, with a preparer reviewing the result before filing.

A quarterly check beats an annual scramble. It catches a trade type the software cannot read, a missing wallet and a platform that stopped sending reports, while you can still fix it. Keep a short log of what you checked and what you changed.

The limitation: reconciliation can show that totals agree, but it cannot tell you the tax treatment of an unusual transaction. For anything novel, such as a new type of token or a margin product, ask a professional.

Where Crypto Tax Made Easy Fits

Crypto Tax Made Easy is based in Little Silver, New Jersey, founded in 2021, with six employees, serving clients nationwide. Its live profile lists Cryptocurrency Investors, Digital Nomads and High Net Worth Individuals as specialties.

Crypto Tax Made Easy has 6 verified client reviews on Sam's List. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Crypto Tax Made Easy is a paying member of our featured program, and payment does not buy its reviews. Ratings and rankings are not indicative of future performance or results.

Ask what the firm needs from you at the start, how it handles an exchange that has shut down or a history with gaps, and how it stores records. The limitation, plainly: the profile does not mention record retention or reconstruction by name, so ask what is included. No firm can rebuild records that no longer exist, and what it can do depends on what you can still pull. You can also browse accountants on Sam's List to compare others.

Frequently Asked Questions

What crypto records do I need to keep?

Keep exchange histories, wallet addresses, transaction IDs, cost basis by lot, fees and notes on unusual transactions, along with the return and schedules that used them. Save files in their original form. Ask a preparer whether your activity calls for anything more.

How long should I keep crypto records?

At least as long as the period in which a return can be questioned, and generally for as long as you hold the asset plus some years after you report its sale, since basis is used when you sell. The window can vary, so confirm it with a tax professional.

What if an exchange shut down and I lost my history?

Look for old exports, emails, bank records and wallet activity, and use on-chain data for transfers. A preparer may help reconstruct what you can document. Do not guess at a number you cannot support. Tell your preparer what is missing.

Is a tax software report enough to keep?

Not by itself. A report is an output built from your exports, and software can misread trade types. Keep the source exports, wallet records and your notes alongside it, and compare the report with each platform's statement.

Before the year ends, download a full history from every exchange you use, list your wallet addresses and save both somewhere other than the device you trade from. You can browse accountants on Sam's List, including the firm above, and ask each how it works from exports that have gaps.

How We Picked This Firm

You should be able to check our work, so here is how this post was built.

The pool. The pool is the firm written up here, a vetted Sam's List member in our featured program. Its profile lists Cryptocurrency Investors among its specialties. This is not a survey of every crypto tax firm, and many Sam's List members and other firms not written up here could fit.

How it is organized. The six items are things to settle, not a ranking. Crypto Tax Made Easy is the only firm written up, so there is no order of firms.

What review counts mean here. We cite the firm's verified review count and its date from its profile. A count shows how many clients wrote something down. It does not measure technical quality, and a firm with fewer reviews is not a weaker one.

What payment does and does not buy. Listing on Sam's List is free, and so is being named in this article. The firm written up here is a paying member of our featured program, which is why it gets a write-up. What payment does not buy is the language we use about a firm, its review count, or a promise that it fits you.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.