DAG Private Client
Crypto tax filing, coordinated the right way
DAG coordinates tax filing through professionals who understand digital assets the way you actually use them. Cost basis reconstruction across exchanges and wallets, staking income, DeFi positions, NFT treatment, and the forms the IRS expects to match.
Section 01
Your accountant probably isn't ready for your tax return
You swapped tokens on three different chains. You earned staking rewards on assets you bought at different prices. You minted an NFT, sold it eight months later, then used the proceeds to enter a liquidity pool.
Your local CPA likely does not have a workflow built for that activity. The IRS asks directly on Form 1040 whether you received, sold, exchanged, or disposed of digital assets. Checking "no" when the answer is "yes" creates problems down the road. Checking "yes" and filing incorrect amounts creates a different set of problems.
DAG Private Client coordinates tax filing support through partner tax professionals who work on digital asset returns full-time. Cost basis tracking across exchanges and wallets, staking income with fair-market valuation at receipt, NFT classification, DeFi position reporting, and the multi-chain reconstruction the IRS expects to match what the exchanges already sent them.
Did you know
1099-DA broker reporting started in tax year 2025. The gap between what exchanges send the IRS and what filers report is closing.
Section 02
Six common filing scenarios. Pricing by form.
Each scenario is priced at $500 per form within the scope defined in the engagement agreement. Most clients need one or two. Some businesses need three or four.
Combination engagements are common. A Wyoming Digital Asset LLC owned by a revocable living trust typically files a 1065 and a 1041. A founder receiving token grants typically files a 1040 plus a Schedule C.
Section 03
Three things break standard tax workflows
01
Cost basis tracking
You bought Bitcoin at $5,000 in 2019, $35,000 in 2021, and $42,000 last year. Which Bitcoin did you sell? FIFO, LIFO, or specific identification changes the taxable gain by tens of thousands. Specific identification requires lot-level documentation at the time of disposition. Most consumer software defaults to FIFO. DAG's partner tax professionals select the method appropriate to the position and document the reasoning.
02
DeFi and staking income
Staking rewards are ordinary income at receipt, valued at the price at the moment of receipt. Rev. Rul. 2023-14 confirmed dominion-and-control. Multiply that by hundreds of small daily reward events across validators and protocols, and reporting becomes a reconstruction problem.
03
NFTs and collectibles
NFTs can be treated as collectibles, which face higher long-term capital gains rates (up to 28%), or they may qualify as regular property. IRS Notice 2023-27 began the collectibles framework for NFTs, and guidance continues to develop. Filing requires judgment calls and documented reasoning.
Section 04
The reconstruction process
The starting point for a typical engagement is transaction data. Most clients arrive with some combination of inputs that need to be reconciled into a single, defensible record.
- Coinbase or Kraken 1099 forms
- CSV exports from exchanges
- Wallet addresses with on-chain activity that was never tagged
- DeFi positions on Uniswap, Aave, or other protocols
- Old hardware wallet addresses you forgot you used
The tax team uses specialized crypto tax software (TaxBit, Koinly, or CoinTracker, depending on the position) to import transactions from exchanges and DeFi protocols. Missing data gets reconstructed from blockchain records. Cost basis gets assigned using the method that fits. State returns reflect proper sourcing.
The result is a return that matches what the IRS already has from the exchanges, with the position-specific decisions documented in writing in case anything is questioned later.
The IRS receives information directly from exchanges. If your return does not match, you will hear about it.
Stat
20%
The accuracy-related penalty for substantial understatement under IRC §6662. Before interest.
Section 05
Why filing wrong creates real problems
The IRS now receives information directly from exchanges. If Coinbase sent you a 1099, the IRS has a copy. If your return does not match, you will hear about it.
Crypto-related enforcement has been increasing. The IRS has treated digital assets as an enforcement priority since Notice 2014-21 first classified crypto as property. John Doe summonses to major exchanges (Coinbase in 2018, Kraken in 2023) have already produced account holder information for the IRS. The 1099-DA broker reporting requirement that began in tax year 2025 closes most of the remaining gaps.
The accuracy-related penalty for substantial understatement starts at 20 percent of the underpaid amount under IRC §6662, before interest. Penalties for willful tax fraud are materially more serious. In December 2024, U.S. v. Ahlgren resulted in a federal sentence in what was reported as the first criminal tax evasion case centered solely on cryptocurrency. Filing accurately matters.
Section 06
Complex situations the team handles
Founders and early employees.
Token grants, vesting schedules, 83(b) elections, equity compensation from traditional startups, and an exit event in the same year.
Multi-state and international.
You moved to Texas for no state income tax, but worked remotely for months from California. Foreign accounts may trigger FBAR and FATCA reporting; treatment of foreign-held crypto continues to evolve.
Active traders.
Thousands of transactions across exchanges and wallets. Airdrops you forgot about. Failed transactions that still used gas. Wrapped and unwrapped tokens. Mark-to-market elections under IRC §475(f) for qualifying traders.
Trust and estate filings.
Form 1041 for irrevocable trusts holding crypto, including DAG Legacy and Strategic Irrevocable Trusts. Coordination with trust attorneys and the Wyoming LLC operating agreement.
Benefits
Why DAG clients file here
Crypto-fluent partner tax professionals. The professionals DAG coordinates with work on digital asset returns full-time.
$500 per form, flat. Six common forms covered. Pricing scope is set in the engagement agreement before work begins.
Cost basis reconstruction. Specific identification, FIFO, or LIFO, selected by the tax professional based on position and applicable rules.
DeFi and staking treatment. Position-by-position reporting with documented valuation at receipt.
Multi-chain support. Ethereum, Bitcoin, Solana, XRP Ledger, Avalanche, Hedera, and other major chains.
Trust and estate coordination. Form 1041 support coordinated alongside DAG Private Client's trust services.
Pricing
Six common filing scenarios
$500 per form
- · Form 1040 (Individual)
- · 1040 + Schedule C (SMLLC)
- · Form 1120 (Corporation)
- · Form 1065 + K-1 (Partnership)
- · Form 1041 (Trust & Estate)
- · Form 709 (Gift)
Scope
Pricing covers the work defined in the engagement agreement. Work outside that scope carries additional fees, disclosed in writing before any work begins.
Questions
Frequently asked
Next step
If you've held crypto for more than a year, you've probably had at least one taxable event you didn't track.
$500 per form. Six common scenarios covered. Crypto-fluent partner tax professionals handle the preparation and signing. DAG coordinates the data work, the integration with your LLC and trust structure, and the handoff. The reconstruction is part of the engagement.
DAG Private Client coordinates tax filing support through licensed tax professionals. DAG is not a CPA firm and does not provide tax advice. Returns are prepared and signed by qualified tax preparers licensed in the applicable jurisdiction.
Crypto tax treatment, cost basis methodology, and specific filing positions (including NFT collectible treatment, mark-to-market elections, FBAR and FATCA applicability to digital assets) depend on individual circumstances and current IRS guidance, which continues to evolve. Specific filing positions are professional judgment calls made by the tax preparer.
Penalty references describe statutory provisions under the Internal Revenue Code as currently in effect. Actual penalty outcomes depend on the facts of each case. Pricing of $500 per form covers the scope of work defined in the engagement agreement. References to specific court cases, IRS notices, revenue rulings, and statutory provisions are factual citations as of the date of publication and may be superseded by subsequent guidance or law changes. The information on this page is general in nature and is not a substitute for jurisdiction-specific tax advice.
Compliance
DAG Private Client services involve estate matters that require qualified independent counsel in the applicable jurisdiction. LLC formation, trust drafting, and estate planning services are provided in coordination with or by qualified independent legal counsel licensed in the applicable jurisdiction. DAG is not a law firm, does not provide legal or tax advice, and does not provide tax preparation services; tax matters are handled through referrals to qualified tax professionals. DAG is not a financial advisor and does not provide financial advice. Investment advisory services are offered through Digital Wealth Partners LLC (CRD No. 328627), an SEC Registered Investment Advisor. Digital Wealth Partners LLC is doing business as Digital Ascension Group – Wealth (“DAG Wealth”). Registration with the SEC does not imply a particular level of skill or training. Form ADV and Form CRS are available upon request or at www.adviserinfo.sec.gov. Registration does not imply a particular level of skill or training.
Asset protection structures, including Wyoming LLCs and trusts, do not guarantee protection against all claims, creditors, or losses. Outcomes depend on specific facts, jurisdiction, and applicable law. The information on this page is for general educational purposes and is not legal or tax advice.