- Cost basis reconstructionRebuilding your history across exchanges and wallets, including the wallet-by-wallet basis rules that began in 2025.
- Form 1099-DA reconciliationMatching what your exchange reported to the IRS against what actually happened, so you're not taxed on basis the broker didn't know about.
- Staking, DeFi, mining & NFTsOrdinary income, swaps, liquidity pools, airdrops and NFT sales reported correctly on your return.
- IRS letters & auditsResponses to IRS crypto letters and CP2000 notices, amended returns, and representation if you're examined.
Why crypto returns got harder in 2025 and 2026
For years, crypto reporting was largely on the honor system. That has changed:
- Form 1099-DA. Custodial exchanges now report your sales to the IRS. Gross proceeds were reported for 2025 sales, and cost basis is reported for assets acquired on or after January 1, 2026 and held in the same account.
- Missing basis. Coins you transferred into an exchange often show up on a 1099-DA with no cost basis. Left uncorrected, the entire sale price can look like profit.
- Wallet-by-wallet tracking. Since January 1, 2025, cost basis must be tracked separately for each wallet or account rather than pooled across everything you own.
The result: the IRS can now compare your return against third-party data automatically. Mismatches generate notices.
What we do for crypto clients
- Import and reconcile exchange, wallet and on-chain data, and identify gaps before they become problems
- Prepare Form 8949 and Schedule D, and report staking, mining and airdrop income
- Reconcile every Form 1099-DA and correct missing or wrong basis on your return
- Review prior years and, where needed, prepare amended returns
- Respond to IRS Letters 6173, 6174 and 6174-A and CP2000 underreporting notices
- Plan ahead: timing of sales, tracking lots, and estimated tax payments on large gains
Received an IRS letter about crypto?
The IRS sends several letters to people it believes may have unreported digital-asset transactions, and CP2000 notices when a 1099 doesn't match a return. Some ask for a response by a deadline; all of them deserve a careful look. Don't ignore them, and don't simply pay a proposed amount that may be built on missing cost basis. We'll review what the IRS has, what you actually owe, and the best way to respond.
New Jersey and New York
Neither New Jersey nor New York has a lower tax rate for long-term capital gains, so crypto gains are taxed at your regular state income tax rates. If you live in one state and work in the other, we'll make sure the gains land on the right return and that you receive the proper credit for taxes paid to the other state.
For a deeper look at the rules, read our article The 1099-DA Trap (2026 Tax Year): Your Crypto Tax Form Could Make You Pay Tax on Gains You Never Had.
Frequently asked questions
Is moving crypto between my own wallets taxable?
No. Transferring crypto between wallets or accounts you own is not a sale. Keep records of the transfer, because the receiving exchange will not know your original cost basis, and note that network fees paid in crypto can themselves be treated as small dispositions.
My Form 1099-DA shows no cost basis. What should I do?
Don't simply report the proceeds as profit. Your cost basis can be supported with your own records, exchange histories and wallet data, and reported on Form 8949 with the appropriate adjustment. We reconstruct and document basis for exactly this situation.
I didn't report crypto in prior years. What should I do?
Talk to a CPA before the IRS contacts you. Depending on the amounts and years involved, amended returns are often the cleanest fix. The right approach depends on your specific facts, so this is worth a confidential conversation.
Are staking rewards taxable before I sell them?
Yes. Under IRS Revenue Ruling 2023-14, staking rewards are ordinary income at their fair market value when you gain control of them. That value becomes your cost basis when you later sell.
Do you work with crypto clients outside New Jersey and New York?
Yes. Most of our crypto work is done remotely through our secure client portal, and we work with clients across the country.