Most of what you can do about your crypto tax bill has to happen before December 31. Once the year closes, the return is arithmetic. This is the short list of moves that still matter in the fourth quarter, in the order we go through them with clients.
1. Harvest losses while the rule still lets you
Selling a position at a loss and buying it back is disallowed for stocks under the wash-sale rule. As of September 2026 that rule does not apply to cryptocurrency held directly, because the IRS treats it as property rather than a security, so you can realize a loss on a coin you intend to keep holding and use it against gains elsewhere. H.R. 9172, introduced in June 2026, would extend the rule to digital assets and is pending, and a Senate draft would reach tax years after 2025 if enacted; confirm the status before you harvest. The rule already applies to spot crypto ETFs.
Losses offset gains first, then up to $3,000 of ordinary income, and the rest carries forward. If you have a large unrealized loss and a large realized gain in the same year, this is the single biggest lever available.
2. Pick the lot you are selling
If you bought the same coin at several prices, which purchase you are selling determines the gain. The IRS allows specific identification when your records support it; otherwise the default is first in, first out. Selling the high-basis lot reduces gain; selling the lot you have held more than a year converts the rate from ordinary to long-term. Since January 1, 2025, basis is tracked wallet by wallet under Treasury Regulation 1.1012-1(j), so the identification has to be made at the account level, not across your whole portfolio, and no later than the time of sale. For coins held at a broker, IRS Notice 2026-20 extends transition relief through December 31, 2026 that lets you identify lots in your own records; self-custody wallets get no such relief.
3. Look at when staking and DeFi income lands
Staking rewards, lending yield, and airdrops are ordinary income when you gain control of them, at that day’s value. You often cannot control when a protocol pays, but you can control when you claim rewards that sit unclaimed in a contract, and you can decide whether to unstake in December or January. A large claim in a low-income year costs less than the same claim in a high-income year.
4. Fix the estimated payment before the penalty accrues
Crypto gains and staking income are not withheld. If this year’s tax will exceed what you have paid in, the fourth-quarter estimated payment is due January 15, and the underpayment penalty runs from each missed quarter. A projection in November tells you the number; paying it in January is cheaper than finding out in April.
5. Clean the records now, not in March
The reconciliation that produces an accurate return, matching transfers between wallets and exchanges, carrying basis across platforms, classifying every DeFi swap, takes weeks when the data is complete and months when it is not. Export every exchange, confirm every wallet address, and note any platform that closed during the year. If a 1099-DA arrives in February with zero basis, you will already have the history that corrects it.
When this is more than a planning question
If any of these steps reveals years that were never reported, stop before you file anything. Unreported crypto income across multiple years can carry penalty exposure that changes how you should come forward.
For everything else, crypto tax planning is a fixed-fee engagement that fits between now and December. Bring the messy version.
This article is general information about tax and accounting topics and is not advice for your situation. Rules change; check the published and updated dates above and confirm current law before acting. Reading this article or contacting Gordon Tax does not create a client relationship.