IRS Revenue Procedure 2024-28: Crypto Reporting Updates 2024

This new guidance has significant implications for how digital assets are reported, particularly regarding tax compliance and transparency. In this article, we'll break down the key elements of Revenue Procedure 2024-28 and explain what it means for digital asset investors in the United States.

This piece was originally published in 2024 and updated in May 2026. It captures the IRS Revenue Procedure 2024-28 and digital asset reporting landscape as it stood at that time. Some developments described here have since evolved. For current guidance, see our comprehensive US Crypto Tax Guide.

Overview of IRS Revenue Procedure 2024-28 Digital Asset Taxation

On June 28, 2024, the Internal Revenue Service (IRS) issued Revenue Procedure 2024-28, which provides detailed guidelines for the taxation of digital assets. This update aims to clarify various aspects of tax regulations, making it easier for digital asset investors to understand their tax obligations.

If you're actively trading cryptocurrencies, it's essential to understand these new guidelines, as they directly impact how you report gains, losses, and different types of transactions. Below, we break down the key aspects of Revenue Procedure 2024-28.

Key Points of Revenue Procedure 2024-28 for Digital Asset Investors

Inventory Methods for Digital Assets

Revenue Procedure 2024-28 provides two acceptable inventory methods for determining the cost basis of digital assets: the specific identification method and the first-in, first-out (FIFO) method.

• Specific Identification Method: This method allows investors to select which units of cryptocurrency they are selling, potentially minimizing taxable gains if they choose units with the highest cost basis. However, it requires detailed record-keeping to track each unit's acquisition date and cost.
• First-In, First-Out (FIFO) Method: FIFO assumes that the first units purchased are the first ones sold. This method can simplify calculations but may result in higher taxable gains if the cryptocurrency value has significantly appreciated over time.

The choice of inventory method can significantly affect your tax liability, so it's important to consider which approach aligns best with your trading activity.

Safe Harbor for Allocating Unused Basis

Revenue Procedure 2024-28 introduces a safe harbor for allocating unused basis in digital assets held as of January 1, 2025. Under this safe harbor, taxpayers can make a reasonable allocation of unused basis to digital assets that remain in their wallets or accounts. This provision helps manage the cost basis of assets acquired before the new rules take full effect.

Requirements for Specific and Global Allocations

The IRS outlines requirements for making specific or global allocations of unused basis to digital assets. Taxpayers can choose between the following approaches:

• Specific Unit Allocation: Taxpayers identify particular units of unused basis and allocate them to a specific pool of digital assets in a wallet or account. This allocation must be clearly documented in the taxpayer's records.
• Global Allocation: This approach involves using a rule-based method to allocate units of unused basis across all digital assets in each wallet or account. Taxpayers must identify and order the units based on specific characteristics and apply a consistent allocation rule.

Both allocation types must be completed by January 1, 2025, to ensure compliance and consistency in tax reporting.

How to Stay Compliant with IRS Revenue Procedure 2024-28 Digital Asset Taxation

To stay compliant with the new IRS guidelines, digital asset investors need to focus on careful record-keeping and understanding the specific requirements of Revenue Procedure 2024-28. Here are some steps to help you remain compliant:

Maintain Detailed Records

Document every digital asset transaction, including the date, amount, fair market value, and any associated fees. This is critical for accurate tax reporting and compliance with IRS requirements.

Use Tax Software or a Professional Service

Digital asset transactions can be complex, especially for active investors. Consider using digital asset reporting tools or engaging a specialized service to track transactions, calculate gains or losses, and prepare the required tax forms.

Stay Informed on Regulatory Changes

The IRS frequently updates its policies on digital assets. The IRS Revenue Procedure 2024-28 digital asset taxation is part of a broader effort to provide clearer guidance, but changes are likely as the regulatory landscape evolves. Staying informed will help you avoid mistakes and stay compliant.

Implications for Digital Asset Investors

The release of IRS Revenue Procedure 2024-28 digital asset taxation represents another step in the effort to bring digital asset transactions into a more comprehensive regulatory framework. By providing inventory methods, safe harbor provisions for unused basis allocation, and emphasizing detailed record-keeping, the IRS aims to increase transparency and accountability in the digital asset space.

For digital asset investors, this means increased responsibility for accurate record-keeping and tax reporting. The penalties for non-compliance can be severe, so understanding these new rules and taking proactive steps to comply is essential.

Final Thoughts

IRS Revenue Procedure 2024-28 digital asset taxation provides important updates for digital asset investors to enhance tax compliance and transparency. Understanding key aspects like inventory methods, safe harbor provisions, and the importance of record-keeping can help investors navigate the complexities of tax reporting.

If you're a digital asset investor, now is the time to reassess your trading activities and ensure compliance with these new IRS Revenue Procedure 2024-28 digital asset taxation guidelines. With more defined regulations in place, it's easier to understand what's expected, but there's also less room for error. Stay informed, keep detailed records, and consider consulting with digital asset advisors to ensure you're not caught off guard.

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