Crypto Record-Keeping: What to Keep, How Long to Keep It, and Why It Decides Your Basis

The IRS does not need you to remember your crypto history. It needs you to prove it. Those are different jobs, and only one of them gets easier with time.

Records used to be a defensive tool: something you pulled out in an audit. Under the 2025 regulations they are also an offensive one. Your right to choose which lots you sell depends on having adequate records in place before the sale. No records, no choice. This guide covers what to keep, how long, and how to set it up so it runs without effort.

The legal baseline

Section 6001 of the Code requires taxpayers to keep the records the IRS prescribes. For crypto, the IRS virtual currency FAQs (Q46) say you must keep records documenting receipts, sales, exchanges and other dispositions, and the fair market value of the crypto, sufficient to establish the positions on your return.

The IRS repeated the point in Rev. Proc. 2024-28. Even its transition safe harbor for wallet-by-wallet basis does not determine how much basis you have. Section 5.04 says unused basis must be substantiated separately under section 6001. Basis you cannot prove is basis you may not get.

The four data points for every unit

The IRS FAQs (Q40) describe the records that support identification of specific units held in one account, wallet or address:

• the date and time each unit was acquired;
• your basis and the fair market value of each unit when acquired;
• the date and time each unit was sold, exchanged or otherwise disposed of; and
• the fair market value of each unit when disposed of, and the amount of money or value of property received.

Those four items are the skeleton. Everything else you keep is there to prove them.

Why records now control your lot choices

For self-custody wallets, Treas. Reg. 1.1012-1(j)(2) lets you specifically identify the units you sell, but only if adequate records are maintained for that asset in that wallet to establish that an identified unit was removed from it. If the records are not there, the identification is not available, and the regulation applies first in, first out.

For exchange accounts, 1.1012-1(j)(3)(ii) says you are responsible for maintaining records to substantiate your identification. And during the relief period through December 31, 2026 under Notice 2025-7 and Notice 2026-20, the identification itself can live in your books and records. That makes your ledger the controlling document. See specific identification and standing orders.

What to actually keep

• Exchange account statements and complete transaction exports for every platform, including accounts you closed and platforms that shut down.
• Every Form 1099-DA, 1099-B, 1099-MISC or other information return, plus any corrected versions.
• A list of every wallet address you control, which device or app holds it, and when you began using it.
• Transaction hashes for on-chain activity, especially transfers between your own wallets, swaps, bridges and contract interactions.
• Records of income events: staking rewards, airdrops, payments for work, with the date and time and the value used.
• Fees paid, in the token used and its dollar value. See gas fees and transaction costs.
• Your standing orders and any lot identifications, with dates.
• Your Rev. Proc. 2024-28 allocation, if you made one, and the records behind it.
• The price source you used for valuations, and notes on any unusual valuation.

Valuation records

Notice 2014-21, Q&A-5, says that when a coin is listed on an exchange with a market rate, fair market value is determined by converting to dollars at the exchange rate in a reasonable manner that is consistently applied. Consistency is the operative word. Pick a reliable source and use it the same way every time.

The FAQs add more detail for older transactions. For a transaction on an exchange, use the dollar amount the exchange recorded (Q26). For transactions that do not go through an exchange, the FAQs say the IRS will accept a value from a blockchain explorer as evidence of fair market value (Q27). If you cannot determine the value of the crypto received, the value of what you gave up generally controls (Q28), and the 2025 regulations adopt a similar fallback in 1.1001-7(b)(4).

How long to keep it

The IRS record retention guidance is built around the statute of limitations. The general period is 3 years. It is 6 years if you omit income that exceeds 25 percent of the gross income shown on your return. It is 7 years if you claim a loss from worthless securities or a bad debt deduction. If you never file, or file a fraudulent return, the IRS says to keep records indefinitely.

For property, the IRS guidance says to keep records until the limitations period expires for the year in which you dispose of the property. For crypto, that is the rule that matters. A coin bought in 2017 and sold in 2027 needs its 2017 purchase records kept until the 2027 return's limitations period runs. Long-held crypto means long-held records.

A system that runs itself

• Download complete exports from every exchange at least quarterly, and immediately before closing any account.
• Keep one master lot ledger per wallet and per account, not one ledger for everything.
• Label every transfer between your own wallets with both addresses and the transaction hash.
• Record income events the day they happen, with value and time.
• Reconcile your ledger to each broker statement before filing.
• Back it all up in two places you control.

If records are already missing, the problem is solvable but different. Lost crypto records covers reconstruction. The goal of this guide is to make sure you never need that one.

Special situations

Closed and failed platforms. Download everything you can while an account still exists. If a platform has already shut down, collect bank records, emails, trade confirmations and on-chain records showing transfers in and out. Those fragments are often enough to rebuild lots.

DeFi activity. Smart contract interactions rarely produce statements. Your wallet address and the transaction hashes are the statement. Record what each interaction was: a swap, a deposit into a liquidity pool, a staking deposit, a claim of rewards. See DeFi liquidity pool tax treatment.

NFTs. Keep the contract address and token ID, the purchase transaction, the price in the token you paid, and its dollar value at that moment. Each NFT is its own lot. See NFT collector tax obligations.

Income received in crypto. An invoice, a contract, or a platform statement showing the reward date and quantity ties your income figure to your basis figure. Those two numbers must match.

The three-minute monthly routine

Records fail because they are treated as a year-end project. Make them a monthly habit instead. Once a month, export new transactions from each exchange, note any new wallet addresses, label any transfers between your own wallets with both addresses and the transaction hash, and log any rewards or income received with the date, quantity and value. Ten or twelve short sessions a year beat one miserable week in April.

What your preparer needs from you

A preparer can only report what you hand over. Give them a list of every wallet and account, each broker information return, your lot ledger by wallet, your standing orders, a schedule of income events, and a note explaining any transfers between your own wallets. If you made an allocation under Rev. Proc. 2024-28, include it. A preparer who receives that package can produce an accurate Form 8949. A preparer who receives a shoebox of screenshots will produce a guess.

Records as leverage

In an examination, the party with the better records usually controls the conversation. If you can produce wallet-level history, timestamped identifications and consistent valuations, the questions narrow quickly. If you cannot, the IRS fills the gaps, and its gap-filling is rarely generous.

Keep the records. They are cheaper than every alternative.

Frequently asked questions