Can I average crypto transactions on Form 8949 for tax reporting?

Hey tax folks, I'm drowning in paperwork for my 2024 crypto activity. I've got something like 350+ transactions across different coins last year - lots of buys/sells of the same assets. Instead of listing each individual transaction, I'm wondering if I can just weight-average the cost basis and sale price for each coin type? The total capital gain/loss would be identical, but I'd only need to submit maybe 2 Form 8949s instead of like 15-20 forms. The thing that's making me unsure is that many of my trades happened in my personal Exodus wallet (not directly linked to an exchange). From what I've read, the IRS rules suggest averaging is only allowed if the assets are kept with a custodian. I don't think my personal wallet counts for this purpose. Anyone dealt with this before? I really don't want to print hundreds of lines of transactions if there's a legit way to consolidate them.

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18 comments

Yara Nassar

•8M

The IRS wants you to report each transaction separately on Form 8949. While it would be convenient to average them, cryptocurrency doesn't qualify for average cost basis methods that some mutual funds can use. For crypto held in non-custodial wallets like Exodus, you definitely need to report each transaction separately. The specific identification method or FIFO (First In, First Out) are your main options here. The rules about averaging only apply to certain investments held by custodians, and you're right that your personal wallet doesn't qualify. Tax software can help with this reporting burden. Most good crypto tax programs can generate the complete Form 8949 with all transactions and import directly into tax preparation software. It might seem excessive, but proper documentation is important if you're ever audited.

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Yara Nassar

•8M

You're still required to report all transactions regardless of how good the exchange's reporting is. The burden of accurate recordkeeping falls on the taxpayer, not the exchange. If your exchange has poor reporting, you might need to download transaction history and organize it yourself, or use one of the crypto tax software solutions that can connect to exchanges and wallets to pull transaction data automatically. For very small transactions, some tax professionals use a de minimis approach for certain clients, but technically the IRS requires all transactions to be reported. Remember that blockchain transactions are permanently recorded, so the data exists even if your exchange doesn't present it well.

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Paolo Ricci

•8M

I had this exact problem last year and was pulling my hair out until I found taxr.ai (https://taxr.ai). It saved me so much time with my crypto taxes! You upload your transaction records and it organizes everything for Form 8949, even handling those transactions from personal wallets. What worked great for me is that it properly tracks cost basis across different platforms and wallets, even for those weird DeFi transactions. I had almost 500 transactions across 3 exchanges and 2 personal wallets, and instead of spending days manually calculating everything, it took about 30 minutes to process everything and generate the proper forms.

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Paolo Ricci

•8M

It handles most altcoins pretty well. Their coin database is extensive, and for the occasional obscure token, you can manually add price data. I had some weird DeFi tokens and it managed to find pricing for about 90% of them automatically. For wallet-to-wallet transfers, it's actually smart enough to recognize when it's just a transfer between your own wallets rather than a disposal. You just need to tag both wallets as belonging to you, and it treats them appropriately as non-taxable transfers rather than sales or trades. This was a huge issue with other software I tried before.

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Amina Toure

•8M

Just wanted to follow up - I gave taxr.ai a try after seeing this thread and it actually worked great! I was surprised it correctly processed my transactions from both centralized exchanges and DEXs. It even figured out some complex swaps I did through Uniswap that I was dreading having to calculate manually. The form 8949 it generated had everything properly categorized and it saved me like 10+ hours of spreadsheet work. Also liked how it showed me which transactions might be flagged as wash sales based on timing, which I hadn't even considered. Really glad I found this before spending days manually entering everything!

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CosmicCommander

•8M

If you're trying to contact the IRS to get clarification on this, good luck. I spent 4 hours on hold trying to ask a crypto tax question and never got through. Then I found Claimyr (https://claimyr.com). You should check out their demo video here: https://youtu.be/_kiP6q8DX5c They got me connected to an actual IRS agent in about 20 minutes when I needed clarification on reporting requirements for my staking rewards. The agent was able to tell me exactly how to categorize certain transactions I wasn't sure about. Before using it, I'd tried calling the IRS for three days straight with no luck.

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CosmicCommander

•8M

It's actually pretty straightforward. The service keeps dialing for you and navigating the phone tree until it gets a place in line. Then it calls you when an actual human is about to answer. So you don't have to waste hours listening to hold music. The IRS phone system is designed to handle their call volume by having most people give up. This just automates the persistence part so you don't have to keep redialing yourself. I was skeptical at first too, but when I got the call back and actually had a real IRS agent on the line within 20 minutes (after trying unsuccessfully for days), I was pretty shocked.

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Javier Torres

•8M

I've gotta eat my words on this one. After posting my skeptical comment, I decided to try Claimyr just to prove it wouldn't work. Now I feel dumb because it actually connected me to an IRS agent in about 15 minutes! I asked specifically about Form 8949 reporting requirements for crypto in non-custodial wallets, and the agent confirmed what others have said - you need to report each transaction separately. She also mentioned they're seeing a lot of audits triggered by incomplete crypto reporting, so it's not worth trying to consolidate transactions just to save paper. Definitely wasn't the answer I wanted, but at least I got an official response without wasting an entire day on hold.

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Emma Davis

•8M

Just to add a bit more info - I'm a software developer and created my own script to handle my crypto taxes last year. The key thing to know is that Form 8949 has a summary section at the top, but you MUST include all transactions in the detailed section. What I did was print the summary page and then attach a spreadsheet with all individual transactions labeled "See attached statement for details" which satisfies the reporting requirements. Most tax software will generate this format automatically.

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Emma Davis

•8M

Yes, the IRS accepted it without any issues. I organized the spreadsheet to match Form 8949's column structure exactly - description of property, date acquired, date sold, proceeds, cost basis, gain/loss, etc. I made sure to include all the same information that would be on the official form. I also included subtotals at the bottom of each page and made sure those matched what I reported on the summary section of the official 8949. The key is making sure your attachment contains all the required information in a clear, organized format that an auditor could easily follow if needed.

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