Uploaded December 2024 | Updated September 2026, 2 hours ago

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After reading an article about the safe-harbor deadline for US tax payers, https://www.cryptobullseye.zone/blog/don-t-get-tax-rekt-sail-your-crypto-ship-into-irs-safe-harbor we knew we needed more information.

Recently Andreas interviewed the author, Kirk David Phillips, CPA, CBP (Certified Bitcoin Professional through cryptoconsortium.org) about the upcoming deadline and what US tax payers need to do before December 31, 2024.

Their discussion starts with the history of reporting, tax gaps, applying traditional finance rules (trad-fi) to crypto, and the new reporting requirements as of 2025.

The most important takeaways are that you have an opportunity, now, to reset cost basis, which may seriously impact your future tax bills, and to protect your previous years reporting, but you HAVE TO take action now.

There are five steps most people should take. You'll need to listen to the whole interview, do a bit more research, and talk to your tax advisor, but here are the basic steps to get you started.
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 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 when the time comes.

In this interview, Kirk and Andreas then discuss a number of questions from Andreas' patrons including:
0:00:00 History of traditional finance and tax gaps along with an overview of the issues.
1:13:00 What are the consequences of not doing anything?
1:17:00 What exactly is a wallet for purposes of the safeharbor?
1:22:00 What software adapts best for this use? Kirk's links to crypto-tax software: https://www.cryptobullseye.zone/crypto-tax-software-store
1:24:00 What should we look out for?
1:27:00 I've used coinjoin etc and only purchased, never sold, do I need to do something? (yes)
1:30 Specific lots would be useful for me, I've only purchased on Coinbase, do I need to do something? (yes)
1:32:00 I've got shared cold storage, is this an issue? (YES, fix it now in the safeharbor)
1:37:00 Summary

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