5 Crypto Tax Mistakes That Cost Traders Thousands

## Stop Donating to the Tax Man Not a tax advisor — but after auditing hundreds of trader portfolios, these are the five recurring leaks we see. ### 1. Mistaking transfers for sales Moving from one wallet to another is NOT a taxable event. Plenty of traders unnecessarily report it as one. ### 2. Ignoring DeFi yield LP rewards, staking yield, and airdrops are taxable when received in most jurisdictions. ### 3. Bad cost-basis tracking Mixing FIFO/LIFO/HIFO accidentally usually inflates gains. Pick one method and stick with it. ### 4. Forgetting wash-sale benefits In the US, crypto is NOT subject to wash-sale rules — you can harvest losses aggressively. ### 5. No record of original purchases If you cannot prove cost basis, the IRS assumes $0. Use Koinly, CoinTracker, or TokenTax. We partner with [tax professionals who specialize in crypto](/contact) for our VIP members. Get a free 30-min review when you join the Gold tier.