Benefits for crypto owners in 2025

The United States Internal Revenue Service (IRS) introduced temporary relief in 2025 to address tax challenges faced by cryptocurrency holders due to the use of centralized finance (CeFi) brokers.

New rules for custodial brokers

As explained by the head of tax strategy at CoinTracker, this relief aims to ease the impact of new requirements under Section 6045 rules, effective January 1, 2025. These rules require brokers to report cryptocurrency transactions and apply specific accounting methods for asset sales.

The IRS issued Notice 2025–7, allowing cryptocurrency holders to avoid the default FIFO method in 2025. This relief enables taxpayers to use their own records or crypto tax software to select which assets to sell. This approach provides greater flexibility during the transitional period.

Tax implications

By default, if users do not choose a preferred accounting method, brokers will apply the “First In, First Out” (FIFO) method. This method can increase tax liabilities in a rising market, as selling the earliest acquired assets usually results in higher taxes due to their lower initial cost. Alternatives such as “Highest In, First Out” (HIFO) or Specific Identification (Spec ID) allow taxpayers to better optimize their reporting.

Next steps 

This relief is automatic, and no immediate action is required from taxpayers. However, starting in 2026, users will need to coordinate with their brokers on the preferred accounting method to avoid the automatic application of FIFO. Taxpayers are also encouraged to maintain detailed records or use specialized software to prevent discrepancies.