Understanding Rev. Proc. 2024-28: Safe Harbor for Digital Asset Cost Basis

Revenue Procedure (Rev. Proc.) 2024-28 introduces a safe harbor transition rule for digital asset cost basis reporting. It applies starting January 1, 2025, and provides taxpayers with a way to reallocate cost basis across wallets and accounts during the transition to new IRS rules.

This guide explains what Rev. Proc. 2024-28 means, who it affects, and what steps you should take to prepare.

What is Rev. Proc. 2024-28?

Rev. Proc. 2024-28 is a Treasury-issued safe harbor for digital asset cost basis.

It does not create new reporting obligations. Instead, it allows taxpayers to:

• Reallocate unused basis of digital assets held as of January 1, 2025 across different wallets or accounts.

• Transition smoothly into the IRS’s wallet-specific cost basis reporting rules.

Going forward, taxpayers must use one of two methods when reporting cost basis:

• First-In, First-Out (FIFO)

• Specific Identification (Spec-ID) — where each digital asset unit sold or transferred is identified by acquisition date and time.

If Spec-ID is not used, FIFO will automatically apply.

Who Does This Impact?

The safe harbor applies to U.S. taxpayers and businesses that:

• Hold digital assets in multiple wallets or accounts, and

• Need to align cost basis tracking with the IRS’s wallet-specific rules starting in 2025.

What’s Changing?

1. Transition Safe Harbor

   • Taxpayers may redistribute existing cost basis for assets held on January 1, 2025 across wallets/accounts.

   • This avoids “stranded” or misaligned basis from past recordkeeping approaches.

2. Specific Identification vs. FIFO

   • Since January 1, 2025, every sale or transfer requires identifying the exact asset unit.

   • Without proper identification, FIFO will apply by default.

Key Deadlines

• January 1, 2025 - Safe harbor transition becomes available; new cost basis reporting rules apply.

• Specific ID - Must be applied at the time of each transaction going forward.

• Global Method Election - Taxpayers needed to establish their chosen approach before January 1, 2025.

How to Comply

To prepare, you should:

1. Review your current cost basis records across all wallets.

2. Use the safe harbor to reallocate basis for assets acquired before January 1, 2025.

3. Decide whether you will use FIFO or Specific Identification going forward.

4. Ensure your systems can track wallet-specific cost basis consistently.

For step-by-step setup, see our guide: Cost Basis Data Migration Guide