IRS Safe-harbor Deadline. Here's a good video by Andreas where he does his best to clarify the comments of the certified bitcoin professional who cannot form a single clear sentence! >
There are five simple steps most people should take.
Step 1: Consolidate your assets: the goal is to reduce the number of wallets you have for each asset type to a reasonable number. If tax were your only consideration, then the ideal number is one asset / one wallet. However, given security and other issues, one to one isn't necessarily realistic. Review what you have, consolidate where you can, in the context of what makes sense for you.
Step 2: In the process of consolidation, remove all assets from centralized exchanges. This is to allow "cost basis cleansing". You can move them back later (after January 1, 2025) if you want. The reason to do this is because unless you have only ever used one exchange, kept your assets there, and never moved them elsewhere, after 2025 the exchange will likely report an incorrect cost basis.
Step 3: Simplify, ideally into pure assets. The more fringe things you're doing, like staking, the more challenging from a tax perspective things will be for you moving forward. If you don't really understand the tax implications, you may want to simplify for now. Spend a bit of 2025 learning about tax and then jump back in when you're ready for the recordkeeping necessary to keep your tax situation clean.
Step 4: Download a report (or create a spreadsheet) showing your tax basis for your assets, correct errors as needed. Write a memo to document any weirdness. Save the file(s) with some reference to "2024 IRS Safeharbor" in the name.
Step 5: Use opentimestamps.org to timestamp your correct report and memo, which will provide proof of your personal declaration in 2024 when and of the time comes.
Note: At no point are you sharing, reporting, or declaring ANYTHING to the IRS. This is ONLY a preparedness exercise, should you choose to do it. #YMMV #safeharbor
