What Happens to Crypto in a Divorce? Cost Basis, IRS Audits, and Hidden Tax Risks

When crypto assets are divided in a divorce, the cost basis transfers with them. That means future capital gains tax liability may follow the asset, and incorrect reporting can trigger IRS audits affecting both partners.

👨‍⚖️ Clinton Donnelly, founder of CryptoTaxAudit and known as the “Crypto Tax Fixer,” explains how forensic wallet tracing, joint tax returns, and cost basis allocation can create unexpected legal and tax exposure during and after divorce.

What You’ll Learn:

• How forensic crypto audits work in divorce proceedings

• What happens to cost basis when assets are split

• Why selling transferred crypto can create unexpected capital gains

• How IRS audits can extend to both former spouses

• When filing separately may limit exposure

• Why accurate gain calculation matters during asset division

This video is especially relevant if you:

• Hold Bitcoin, Ethereum, or other digital assets

• Are married and file jointly

• Are going through divorce or separation

• Have significant unrealized crypto gains

• Are concerned about IRS audit exposure

💼 Need an accurate crypto gain calculation during divorce or asset division?

Schedule a consultation:

👉 https://www.cryptotaxaudit.com/crypto-tax-consultation

For more on capital gains and reporting requirements:

Official IRS page on capital gains:

https://www.irs.gov/taxtopics/tc409

Disclaimer: This video is for educational and informational purposes only and does not constitute legal, tax, or financial advice.

Tax laws and IRS procedures can change, and every situation is unique.

You should consult with a qualified tax professional before taking any action based on this content.

Watching this video does not create a client relationship with Clinton Donnelly or CryptoTaxAudit.

For personalized guidance, visit

👉 https://www.cryptotaxaudit.com/crypto-tax-consultation