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). This change impacts reports filed in 2026.
Why does this matter?
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.
What is the difference between Universal and Per Wallet tracking?
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 good news
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:gt
- Select and document your chosen allocation method before January 1, 2025 or the date of your first trade in 2025.
- Keep records of your chosen basis before executing trades.
- Complete the migration from Universal to Per Wallet basis tracking by the time you file your 2025 tax return.
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.
How Summ is helping you Transition from Universal to Per Wallet cost tracking
If you're a new user to Summ, per wallet tracking will be automatically applied to your transactions.
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. Learn more about the transition and how to manage the change with lock periods in the help article: US Tax Guide: US tax season changes and switching from Universal to Per-Account cost basis tracking.
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