🚨 IRS Notice 2026-20: Your Broker's Cost Basis Records Just Got More Time
🚨 IRS ALERT — MAY 6, 2026
The IRS released Notice 2026-20 in March — and if you hold crypto on Coinbase, Kraken, or any custodial exchange, this directly affects how your cost basis gets reported.
Here's what it means in plain English:
Starting with 2026 transactions, brokers are required to report both your gross proceeds AND your adjusted cost basis on Form 1099-DA. But Notice 2026-20 gives taxpayers extended transition relief — meaning you still have time to rely on your OWN records when identifying which lots you're selling, rather than defaulting to your broker's records.
Why this matters:
→ Brokers default to FIFO (first in, first out) — which often triggers the HIGHEST possible tax bill
→ If you've held BTC or ETH at multiple price levels, choosing HIFO (highest cost first) can legally eliminate tens of thousands in taxable gains
→ This relief window is temporary — once it closes, your broker's method locks in
Action items for right now:
- Export your complete transaction history from every exchange you use
- 2. Identify your cost basis method (FIFO, HIFO, LIFO, or specific ID)
- 3. If you haven't documented your method yet — do it before December 31, 2026
This is one of the most important compliance windows of the year. Don't let it close without acting.
Questions? Drop them below or book a free call: calendly.com/samuel-empowercapital/15min
— Samuel Oduro, MBA, EA | IRS Enrolled Agent | Former EY & PwC | empowercapital.co
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🚨 IRS Notice 2026-20: Your Broker's Cost Basis Records Just Got More Time
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