You have to now report gains separately for every self-hosted wallet and custodial account. You have to choose an ordering strategy (oldest, largest, etc...) for gains reporting, and you need to write a letter of intent stating your intent to comply and which ordering strategy you will use going forward. You don't have to send the letter of intent to the IRS; just keep it for your records, should you be audited.
Login to reply
Replies (2)
Just adding more compliance cost. A hidden tax. Having said that, you could have a wallet of each accounting method, and have the optionality to keep the tax bill to a minimum (0). For example, oldest coins can be used on low income years (less than 40k) to lower your long term cap gains bill to 0.
I don't know if you can have homogenous cost basis strategies. My impression was that you had to apply the same strategy to each.