Podcast Summary: Unchained – "Why 2025 Crypto Taxes Will Be Trickier Than Normal: What You Need to Know"

Host: Laura Shin
Guest: Laura Walter, CPA and founder of Crypto Tax Girl
Date: January 29, 2026

Episode Overview

In this in-depth episode, Laura Shin dives into the complex world of 2025 crypto taxes with guest Laura Walter, a leading CPA specializing in cryptocurrency taxation. The conversation focuses on critical regulatory updates impacting filings for 2025, including the introduction of the 1099-DA form, “wallet-by-wallet” accounting, and shifting IRS requirements. The show is loaded with actionable tips, strategic advice, and explanations of both routine and unusual crypto tax situations to guide crypto investors of all levels through one of the most challenging tax years for digital assets to date.

Key Discussion Points and Insights

1. The New 1099-DA Form

[02:00–08:00]

• What is 1099-DA?
  • Issued by US-based crypto exchanges (Coinbase, Kraken, Gemini, etc.) to all US customers to report "Digital Asset Proceeds from Broker Transactions."
  • Only shows sales proceeds, not cost basis, meaning it often reports a much larger number than a user’s net gain or loss.

“It’s only going to show the proceeds, so…you could take a hundred dollars, trade it a hundred times, and your 1099-DA would show $10,000.”
—Laura Walter [04:20]

• Timing:
  • Deadline for exchanges to issue is February 17, but a safe harbor allows some to be up to a year late, which can complicate tax filing.

“If you are expecting to receive one of these, definitely wait to file your taxes until February 17th.”
—Laura Walter [04:00]

• Matching up with your return:
  • The form may cause panic due to large reported numbers; always supplement with accurate cost basis on your return to avoid overpaying.

2. Cost Basis and the Wallet-by-Wallet Accounting Shift

[08:13–17:00]

• The Big Change:

  • The IRS no longer permits "universal accounting." Instead, gains and losses must be calculated per wallet/account—no mingling across exchanges.
  • Requires a “safe harbor reallocation” as of Jan 1, 2025: users must assign existing purchase lots across their various accounts, influencing later gain/loss calculations.

• Strategic Allocation:

  • Assign high-cost-basis assets to your most active wallets to minimize taxable gains from frequent trades.
  • Place lowest-cost-basis (biggest potential gains) into long-term storage wallets to avoid inadvertent capital gains from small trades.

“You kind of want to look at…which wallet you’re pulling from to make sure you’re not creating unintentional large capital gains.”
—Laura Walter [12:04]

• Why the Change?
  • Designed to reduce tax-optimization tactics and increase auditability, though with the upside of eventually aligning crypto accounting with traditional brokerage models for more “ordinary” users.

“Now, you have less flexibility…you’re not always able to maximize your losses or gains in hindsight.”
—Laura Walter [14:26]

3. Accounting Methods: FIFO, LIFO, HiFO

[19:00–22:40]

• Still an Option (per wallet):

  • Users can choose (per exchange/wallet) among FIFO (“first in, first out”), LIFO (“last in, first out”), and HiFO (“highest in, first out”). The best method depends on individual situations:

    • HiFO/LIFO: Defer tax by realizing the least gains possible.
    • FIFO: May be advantageous for those with mainly long-term gains and little other income due to preferential tax rates.

“Most people choose to defer their gains—HIFO and LIFO are more popular.”
—Laura Walter [22:37]

4. Practical Tax Tips for 2025 Crypto Filers

[23:08–25:36]

• Accurate Cost Basis Calculation:

  • Use crypto tax software for reconstructing years of transaction history, especially if you’ve transferred assets between platforms.
  • Compare end-of-2024 cost basis totals before and after allocation as a reconciliation check.

• Software & Recordkeeping:

  • Recommended to stick with one software year-over-year.
  • APIs are preferred for consistent, automated transaction importing.
  • Keep strict separation between business, personal, and retirement accounts/wallets.

“Crypto is messy…try and keep things cleaner, because you’re going to be responsible for it.”
—Laura Walter [35:00]

5. Stablecoins, DEX, and DeFi Nuances

[37:00–38:50; 58:10–60:36]

• Stablecoins:

  • Still reported as property; proposals like the Parity Act may eventually exempt them from capital gains reporting.
  • For now, the cost basis matches proceeds—no gain/loss unless stablecoins depeg.

• DeFi Activity:

  • Yields, trades, LP tokens, and DEX transactions are generally taxable and complex to track.
  • Crypto tax professionals or advanced software are often necessary.

6. Emerging Trends & Special Situations

Prediction Markets, Perps, Airdrops, ICOs, Privacy Coins, and More

• Perpetuals (“Perps”) [39:04–40:50]:
  • Unregulated perps are treated as regular capital gains/losses (Schedule D).
• Prediction Markets [41:04–44:51]:
  • Gains are taxed as gambling winnings; losses are harder to deduct due to itemization requirements and a new 90% limitation.
• Airdrops & ICOs [51:42–55:15]:
  • Airdrops are taxed as income at fair market value on receipt.
  • ICO contributions: sending crypto to buy in is a disposition/spend, taxed at that moment.
• Privacy Coins [55:15–57:59]:
  • Taxable/reportable like any asset; but burden of proof is higher, and if you lack records, the IRS assumes $0 cost basis if audited—a potentially huge tax hit.
• DeFi Transactions [58:10–60:36]:
  • Highly complex; consult software or a pro for high-volume activity.

7. Mining & Staking

[60:36–64:48]

• Taxed as Income on Receipt:
  • Mining/staking rewards must be reported as income based on value at the time they are “controlled.”
  • Associated mining expenses can be deducted (on Schedule C for most individuals).
  • Policy proposals (e.g., Parity Act) might delay taxation until sale or after 5 years.

8. Hacks, Scams & Bankruptcies

[65:13–70:11]

• Celsius, Voyager, and Others:
  • Major losses can usually be claimed as capital or theft losses, if held for profit-motive.
  • Document, document, document—police reports and transaction records matter.
• IRS Letters:
  • Crypto owners are receiving compliance notices; best to proactively catch up with past returns now.

9. The Digital Asset Parity Act and Coming Changes

[70:39–75:52]

• Key Proposals:
  • Exempting stablecoins from capital gains
  • Delaying taxation of mining/staking rewards until disposal or after five years
  • $200 "de minimis" exception for small purchases with crypto
  • Removing appraisal requirements for crypto donations over $2,000
  • Introducing wash sale rules for crypto, eliminating immediate tax-loss harvesting

“It’s great for crypto users, but wash sale rules coming in would definitely be a downside.”
—Laura Walter [75:45]

Recommended Strategies for 2026 and Beyond

[76:18–80:46]

• Keep It Simple:
  • Minimize wallets and exchanges.
• Segregate Activities:
  • Store long-term holdings in separate wallets. Use new, high-basis coins for frequent trading.
• Plan for Gains:
  • Set aside cash for taxes on gains as soon as possible—don’t get “caught out” if the market falls by next April.
• Get Compliant:
  • With increased IRS scrutiny and information sharing, now is the time to clean up any prior-year reporting gaps.

“The IRS is really increasing their crypto compliance efforts, their audits, their letters…get ahead of it now.”
—Laura Walter [79:25]

Notable Quotes and Memorable Moments

• “Just because a bot did it doesn’t mean you’re not still responsible for the gains and losses.”
  —Laura Walter [50:02]

• “If you don’t have the records and you’re audited…they just treat it as a $0 basis, which is obviously a big problem.”
  —Laura Walter [55:42]

• “If you’ve stuck with us this long, shout out to you. Obviously, I love taxes, but I know everyone else doesn’t!”
  —Laura Walter [81:00]

Timestamps for Key Segments

• [02:00] – 1099-DA explained
• [08:13] – Wallet-by-wallet accounting shift
• [19:00] – Accounting method options (FIFO, LIFO, HiFO)
• [23:08] – Safe harbor cost basis allocation tips
• [33:47] – General software and compliance tips
• [37:00] – Stablecoins and taxation
• [39:04] – Perps and prediction market tax reporting
• [41:04] – Prediction markets: gambling win/loss rules
• [51:42] – Airdrops and ICOs
• [55:15] – Privacy coin reporting challenges
• [58:10] – DeFi activity: complexity and software needs
• [60:36] – Mining and staking guidance
• [65:13] – Hacks, scams, bankruptcies and loss deduction
• [70:39] – Digital Asset Parity Act proposals
• [76:18] – Preparing for 2026: strategies for easier reporting

Final Takeaways

This episode is absolutely must-listen (or must-read!) for US crypto users facing the new 2025 tax landscape. Laura Walter's detailed, friendly, and practical insights demystify daunting regulatory changes, highlight the value of diligent recordkeeping, and reveal strategies for minimizing tax pain. Her bottom line? Stay organized, educate yourself, use the right tools (or experts!), and act early to stay on the right side of the IRS.

Need more help?: Laura Walter and her team at Crypto Tax Girl are open for one-on-one help—mention “Unchained” for a $100 discount. Extensions are always an option if you need more time to untangle your records.

Tip: For more information and $100 off Crypto Tax Girl’s services, visit cryptotaxgirl.com/unchained