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2025 Year-End Bitcoin Tax & Self-Custody Planning Guide for US Holders

Updated December 2025

As 2025 comes to a close, many US Bitcoin holders use this time to review their positions ahead of the calendar tax year (January 1–December 31). This in-depth guide covers key tax updates, common topics holders discuss with professionals, record-keeping best practices, and a concise self-custody security review.

It’s designed to bring together the key questions and concepts many people raise in year-end planning conversations—so you can approach your tax and financial professionals better prepared, and keep your Bitcoin safer for the long term.

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Critical Disclaimer

The Bitcoin Adviser does not provide tax, legal, financial, or investment advice. This is general educational information only, based on public IRS guidance and other sources as of December 2025. Tax rules are complex, individual circumstances vary, and errors can lead to penalties. This guide is not a substitute for personalized advice—always consult a qualified CPA, tax attorney, or other licensed professional experienced with digital assets before taking any action.

Tax Updates

Major 2025 Crypto Tax Changes Impacting Bitcoin Holders

New Form 1099-DA Reporting

For the first time, many centralized exchanges and brokers must report gross proceeds from 2025 digital asset sales and exchanges to the IRS (and to you) via Form 1099-DA, expected to arrive in early 2026. Cost basis reporting for certain covered assets is scheduled to phase in after proceeds reporting.

Per-Account / Per-Wallet Cost Basis Focus

With broker reporting expanding, proceeds and cost basis will increasingly be tracked and reported at the account or wallet level. That makes it more important to maintain clear, wallet-level transaction histories, rather than relying on rough averages across all holdings.

Transitional Relief for 2025

For 2025, many taxpayers can still rely primarily on their own records to establish cost basis and holding periods, even as new broker reporting rules begin to apply. Good documentation now will make future years—when more detailed reporting kicks in—far easier.

Bitcoin Remains “Property”

Bitcoin continues to be treated as “property” for US federal tax purposes, not as currency. That means sales, trades, conversions, and using Bitcoin to make purchases generally trigger capital gains or losses.

Wash-Sale Rules Still Do Not Apply

Unlike stocks and securities, current law does not apply traditional wash-sale rules to Bitcoin. In practice, that means you can sell Bitcoin at a loss and repurchase immediately without automatically disqualifying the loss—though very aggressive patterns can still be challenged under “economic substance” or similar doctrines.

State-Level Considerations

State tax treatment of Bitcoin gains and losses varies. Some states closely follow federal rules, others have their own capital gains or income tax frameworks, and a few have no personal income tax at all. Always confirm how your state (and any state where you file) treats digital asset transactions with a state-knowledgeable tax professional.

Year-End Strategies

Common Topics Bitcoin Holders Explore at Year-End

These are general topics many Bitcoin holders discuss with qualified tax professionals before December 31. A simple way to use this guide: 1) scan the tax updates, 2) choose one or two topics below for your CPA meeting, and 3) complete the security review at the end.

Tax-Loss Harvesting

If your Bitcoin is down from its cost basis, realizing the loss can potentially offset capital gains from crypto, stocks, or other assets. Unused capital losses can generally offset up to $3,000 of ordinary income annually, with excess carried forward indefinitely under current rules.

Example: Sell Bitcoin bought at $100,000 now worth $80,000 → realize a $20,000 capital loss. Under current law, there is no specific wash-sale restriction for Bitcoin, so you may be able to repurchase immediately while still claiming the loss—subject to overall IRS anti-abuse principles.

Long-Term Holding Review

Bitcoin held more than one year generally qualifies for preferential long-term capital gains rates (0%, 15%, or 20% depending on income levels), compared with short-term gains taxed at ordinary income rates up to 37%. Some holders review whether to delay or stagger potential sales to align with long-term treatment and income thresholds.

Gifting Bitcoin

In 2025, you can generally gift up to $19,000 per recipient without using your lifetime estate and gift tax exemption, under the annual gift tax exclusion. Recipients typically inherit your cost basis, which can shift future appreciation and potential tax exposure to family members who may be in lower tax brackets.

Larger gifts may tap into your lifetime gift and estate tax exemption. This is an area where coordinated advice from estate planning and tax professionals is especially important.

Tax-Advantaged Accounts (HSAs & IRAs)

As highlighted in our guide “How to Hold Bitcoin in Your HSA”, certain custodians allow Bitcoin exposure in Health Savings Accounts, which can offer a powerful combination of pre-tax contributions, tax-deferred or tax-free growth, and tax-free withdrawals for qualified medical expenses.

Similar opportunities may exist through self-directed IRAs and other retirement accounts. Availability, fees, and rules vary significantly by provider, so these structures should always be reviewed with a qualified professional before implementation.

Record-Keeping for 2025 & Beyond

With Form 1099-DA and expanded broker reporting on the horizon, organized records are critical. At a minimum, track for each wallet or account: acquisition dates, cost basis (in USD), fair market value at disposal, and transaction IDs. Dedicated crypto tax software can help reconcile exchange and self-custody activity and reduce the risk of mismatches that could trigger IRS notices. Well-structured data also makes it easier for your tax professional to complete Form 8949 and Schedule D accurately.

Practical Support

Need Help Applying This to Your Own Bitcoin?

Many US holders don’t need more speculation—they need clear, organized information and secure structures. If you’d like support preparing clean records, designing a safer custody setup, or framing the right questions for your CPA or adviser, our team can help you get sorted efficiently.

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Security Review

Year-End Self-Custody & Digital Security Check

Bitcoin security isn’t just about your wallet—it’s about your entire digital perimeter. Email, cloud accounts, SIMs, and devices are common attack paths. This quick review helps you identify your biggest risk exposures in under 5 minutes.

For smaller balances, simple self-custody can be enough. For meaningful family-level holdings, we generally recommend upgrading to collaborative security—our 2-of-3 multisig approach that removes single points of failure and supports documented inheritance.

1. Does Your Custody Match Your Holdings?

Use a simple tier: hot wallet ($1–$300), single-sig hardware wallet ($300–$10,000), and collaborative security (2-of-3 multisig) for amounts above $10,000. If meaningful funds are still on single-sig or exchanges, this is your highest-impact upgrade. View the Self-Custody Guide

2. Is Your Digital Perimeter Locked Down?

Your Bitcoin is only as secure as your email and passwords. Use a password manager for strong, unique logins, protect key accounts with hardware security keys, and lock down the primary email address used for account recovery. View the Security Centre

3. Are Your Seed Backups Verifiable & Durable?

Backups should be on fire- and water-resistant materials, stored in separate secure locations, and tested periodically. Avoid digital photos and cloud storage. Seed compromise or loss is still the most common catastrophic failure in single-sig setups.

4. Would Your Family Be Able to Recover Funds?

If something happened to you tomorrow, could your family realistically recover your Bitcoin? If not, you likely still have a single-point inheritance risk. Collaborative structures and clear written instructions dramatically reduce this burden. View the Estate Plan Protocol

5. Do You Have Tested Recovery Procedures?

Device loss, SIM compromise, or account lockout shouldn’t create panic. Recovery paths should be documented and rehearsed before they’re needed—for wallets and for key online accounts like email and password managers. View the Bitcoin Emergency Kit

Security in One Sentence

Perimeter security protects your digital life. Collaborative security protects your Bitcoin wealth. Together, they eliminate single points of failure. Since 2016, zero satoshis lost across all collaborative security clients using this framework.

Next Steps

Ready for 2026 and Beyond?

Combining Bitcoin’s potential with thoughtful, tax-aware holding and robust self-custody can support long-term capital preservation across generations. If you’re exploring collaborative custody, multisig setups, HSA/IRA Bitcoin options, or inheritance and recovery planning, our specialists are here to help—without pressure or obligation.

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We’re committed to free, high-value education—because an informed Bitcoin community benefits everyone. For the latest official IRS information on digital assets, visit irs.gov/digital-assets.

Last updated December 8, 2025.