Can someone explain do I Owe Capital Gains on Spot ETF Shares??

I bought shares of iShares Bitcoin Trust (IBIT) in my taxable brokerage account throughout 2025. I also hold Bitcoin directly on Coinbase. My tax situation is a mess and I have several questions:

1. I sold some IBIT shares at a gain. Is this taxed as regular capital gains (like stocks) or does the IRS treat it differently because it holds actual Bitcoin?

2. I sold Bitcoin on Coinbase at a loss within 30 days of buying IBIT. Does the wash sale rule apply across Bitcoin and Bitcoin ETF shares? My accountant is not sure.

3. My Coinbase 1099 shows cost basis that does not match my records. Several transfers between wallets are being treated as dispositions. How do I fix this?

First year dealing with crypto taxes and I am completely lost. Any guidance appreciated.

Good questions. Here is how each issue breaks down for tax year 2025:

1. IBIT capital gains: Bitcoin spot ETFs like IBIT are structured as grantor trusts. When you sell shares, you report capital gains or losses on Schedule D just like stocks. Short-term (held less than 1 year) gains are taxed as ordinary income; long-term gains get the preferential 15%/20% rate. The ETF itself may also generate taxable events through its operations — check your 1099-B and any K-1 forms from the fund.

I strongly recommend hiring a CPA with crypto experience for your first year. The penalties for incorrect crypto reporting can be significant.

The wash sale issue is going to be a huge problem for a lot of people this year. I know traders who have been tax-loss harvesting Bitcoin by selling at a loss and immediately rebuying for years, precisely because the wash sale rule did not apply to crypto.

Now that Bitcoin ETFs exist, the IRS could argue that buying IBIT within 30 days of selling Bitcoin is a wash sale, since they are “substantially identical” assets. My tax attorney says the safe play is to wait 31 days between selling Bitcoin at a loss and buying any Bitcoin ETF. Not worth the risk of an audit.

Not gonna lie, from the brokerage side: starting in 2026, the IRS requires brokers and exchanges to report digital asset transactions on Form 1099-DA. This is a new form specifically for crypto. Your 2025 taxes are the last year where reporting is somewhat inconsistent across platforms fr fr.

For the cost basis issue: download your FULL transaction history from Coinbase (Settings > Statements > Generate Report). Do NOT rely on the 1099 alone. If you transferred Bitcoin from another wallet to Coinbase, you need to manually input the original purchase date and cost basis. Coinbase defaults to treating the transfer date as the acquisition date with a /bin/zsh cost basis, which dramatically overstates your gains.

This is incredibly helpful, thank you all. I signed up for CoinTracker and it identified over ,000 in incorrect gains on my Coinbase 1099 from wallet transfers being treated as sales. My actual tax liability is significantly lower than what Coinbase reported.

I also hired a crypto-specialized CPA ( for the full return). She confirmed the wash sale gray area and is documenting our position that the Bitcoin-to-IBIT transaction should not trigger wash sale rules since direct crypto is not a security. We are including a disclosure statement with the return just in case.