The IRS Issues Temporary Tax Relief for Cryptocurrency in 2025

On January 1, according to News.Bitcoin, the Internal Revenue Service (IRS) has issued a temporary relief measure, expected to benefit cryptocurrency holders on centralized finance (CEFI) trading platforms in 2025. This regulation will take effect on January 1, 2025, requiring the use of the first in, first out (FIFO) accounting method for crypto assets, unless the preferred methods such as highest in, first out (HIFO) or Spec ID are chosen.

The IRS's temporary relief allows taxpayers to continue using their own records or tax software to identify the specific assets being sold. This relief period only applies to CEFI transactions between January 1, 2025, and December 31, 2025. After this date, taxpayers will need to formally choose an accounting method with their brokers.