Overview

Revenue Procedure 2024-28 introduces new cost basis reporting requirements for digital assets, taking effect on January 1, 2025. This guide outlines the key changes, implications, and actionable steps for U.S.-based crypto enterprises to ensure compliance.

What is Rev. Proc. 2024-28?

Rev. Proc. 2024-28 is a Treasury update that establishes new rules for determining the cost basis of digital assets. It replaces the previous "universal" transaction approach with wallet-specific tracking, requiring taxpayers to adopt either the First-In, First-Out (FIFO) method or Specific Identification (Spec-ID) for reporting.

Who Does This Impact?

The new rules apply to U.S. taxpayers and businesses that:

• Sell, exchange, or dispose of digital assets.
• Manage digital assets across multiple wallets or accounts.

What’s Changing?

1. Specific Identification Requirement: Taxpayers must identify the sold or transferred digital asset by date and time. Without specific identification, FIFO will automatically apply.
2. Safe Harbor: Transitional relief allows reasonable cost basis allocations for assets acquired before January 1, 2025, under specific eligibility criteria.

Key Deadlines

• January 1, 2025: New rules become effective for all transactions.
• Allocation Method Deadline:
  • Specific ID: Must be determined before the transaction.
  • Global Method: Must be established before January 1, 2025.

How to Comply

https://scribehow.com/page/Cost_Basis_Data_Migration_Guide__oDN4GT4lS9Kk9U4dV-qm6g

Why Act Now?

Non-compliance with Rev. Proc. 2024-28 may lead to discrepancies, penalties, and challenges in future transactions. Early preparation will reduce administrative burdens and provide opportunities to optimize tax reporting.

Still have questions?

Visit our Help Center or contact our support team to learn more about automating cost basis tracking with Cryptio.