Starting January 1, 2025, US taxpayers will no longer be allowed to use a single, universal pool of crypto assets to track cost basis across multiple wallets or exchanges (referred to as “universal cost basis tracking” in Summ). Instead, the IRS now requires taxpayers to track cost basis “per wallet” or “per account” (referred to as ‘By wallet and exchange’ in Summ).

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 track cost basis independently. If you previously relied on a universal pool, you must now ‘break apart’ that single cost basis pool into several smaller ones per each account.

Historically, many investors used Universal Tracking to minimize gains across their entire portfolio; for example, if you bought 1 BTC on Coinbase years ago for $10,000 and another 1 BTC on Kraken recently for $60,000, Universal FIFO allowed you to sell the BTC on Kraken while claiming the $10,000 Coinbase cost basis.

However, under the new IRS regulations and the introduction of Form 1099-DA, the IRS now requires the cost basis to be siloed within the specific account where the transaction occurs. This means that if you sell on Kraken, you must use the cost basis of the BTC actually held on Kraken, you can no longer "reach across" to another exchange to utilize a more favorable price point. This change ensures that the data reported by exchanges to the IRS matches the taxpayer’s return, requiring investors to be much more strategic about which platforms they use for liquidating assets.

The IRS has introduced a “safe harbor” provision (see Rev Proc 2024-28) to ease this transition. Under the safe harbor, taxpayers can rely on any reasonable method to allocate 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 new 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.

For the majority of users still using universal cost tracking by the end of 2025, we have automatically migrated your account to use the “by wallet and exchange” cost tracking method as of 1/1/2025. You can see this migration by navigating to the tax settings tab and clicking on “lock periods”. For your transactions prior to 2025, you’ll see the “universal cost tracking” method is enabled, with the “by wallet and exchange” method enabled for 2025 and onward. If you see this period enabled within your account, no further action is required.

For the subset of users who are still using universal cost tracking and have already locked periods within 2025, you will need to unlock the 2025 periods and manually migrate your account.

To do so, follow the steps outlined below:

No, you don’t have to give the IRS any additional reports beyond what is required for your tax return, unless the IRS is specifically requesting additional details about your cryptocurrency activity.

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

You may choose to use the default ‘lowest cost, highest balance’ approach, or choose the alternative redistribution method that fits your tax situation the best. For additional information or help deciding, it’s best to contact a crypto tax professional.

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.

No. Your actual account balance (the total amount of assets you own) will not change.

However, you may see an adjustment to your Tax Balance. This represents the "tax lots" or cost-basis records associated with your assets.

During the migration, we performed a reconciliation to ensure that every asset in your account is backed by a corresponding tax lot. If your records were incomplete prior to 2025—often due to uncategorized transactions—we made an adjustment to bring them into sync.

The adjustment simply aligns your tax records with the actual assets currently in your account:

If your tax balances were too low: (Usually caused by "incoming" transactions that weren't categorized). We added tax lots to match your actual holdings.

If your tax records were too high: (Usually caused by "outgoing" transactions that weren't categorized). We removed excess tax lots to match your actual holdings.

No action is required from you. These adjustments were made automatically to ensure your tax reporting is accurate moving forward. However, to prevent future discrepancies, we recommend consistently categorizing all new transactions.

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].