The most frequently heard words in the crypto community recently are "liquidate" and "run first." At first, I thought everyone was overreacting, until I carefully studied the latest US tax policies and understood why so many investors are eager to sell.

The core issue is this: starting in 2025, all US centralized trading platforms will be required to report your transaction records and coin sale details directly to the IRS. By the 2026 tax season, the IRS will also send you a record form. It sounds harmless, but there's a big trap—this form will initially only show your gains from selling coins; your original purchase cost? Most likely, it will be blank.

This is problematic. Keep in mind, the IRS won't negotiate with you. If you can't provide proof of your purchase cost, the system will automatically calculate your taxable income as if your cost basis is zero. In other words, if you bought coins for $10,000 and sold them for $100,000, you should pay taxes on a $90,000 profit, but the IRS will calculate it based on the entire $100,000. You will owe much more in taxes than expected, and you'll have to pay the difference later.

The situation is even more complicated. Starting in 2025, the IRS explicitly requires "separate accounting of costs per wallet and platform." This means you need to keep records for each exchange and each wallet separately. The purchase costs recorded on one platform or wallet must match the sale records; any mismatch could be flagged as an issue.

So what is the key now? Quickly organize your historical transaction data. Whether it's the exact time, amount, and exchange rate of your coin purchases, or transaction records from exchanges, all must be backed up and saved. This isn't about avoiding taxes; it's about protecting yourself during IRS audits. When that demanding form finally arrives, it's too late to gather additional information. For investors who have been active in the crypto market, this "compliance exam" leaves no room for retakes.