The US Internal Revenue Service (IRS) announced that the implementation of new crypto tax reporting regulations has been postponed by one year to the beginning of 2026. This decision aims to provide additional time for intermediaries to comply with rules for determining the cost basis of crypto assets on centralized platforms.
In July, the IRS and the Treasury Department released rules governing the accounting methods to be applied to crypto asset sales. The new regulations specify that if investors do not choose a specific accounting method, the "First In, First Out" (FIFO) method will be automatically applied. FIFO assumes that the earliest acquired crypto assets are the first to be sold. Originally scheduled to take effect on January 1, 2025, the implementation date has now been pushed to January 1, 2026.
CoinTracker Tax Director Shehan Chandrasekera expressed concerns about the practicality of the regulations. Chandrasekera noted that most centralized finance (CeFi) platforms lack the infrastructure to allow users to select specific crypto units for sale. The mandatory use of FIFO could lead to challenges for investors, especially during bull market conditions, potentially causing unfavorable outcomes in asset sales. The delay is seen as a significant move to offer the industry additional flexibility.
