As I understand it (Iām not an accountant nor attorney):
It means that each wallet and/or custodian now independently tracks cost basis for calculation gain/loss when selling. Previously, one could treat all of oneās wallets collectively.
The purpose of the āSafe Harborā is for people who were using this kind of multi-wallet accounting to declare the cost basis for each wallet/custodian. Resetting, effectively, for the new tax year, since it would be difficulty or impossible to reconcile the old method with the new requirements.
How do they intend to enforce a per-wallet cost basis for self custodial wallets?
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You must prove when they ask. Failure to comply is their enforcement.
Lucky for me every address I use is a different wallet.
