SECTION 3. DEFINITIONS

Except as otherwise provided, the following definitions apply solely for purposes of this revenue procedure:

.01 Digital asset . A “digital asset” has the meaning provided in § 1.6045-1(a)(19) of the 2024 final regulations other than digital assets not required to be reported as digital assets pursuant to § 1.6045-1(c) (8)(ii), (iii) and (iv) of the 2024 final regulations.

.02 Basis. “Basis” has the meaning provided in section 1012.

.03 Original basis . “Original basis” means the taxpayer’s cost of the digital asset unit as provided in section 1012 as adjusted by section 1016; if the digital asset unit is substituted basis property within the meaning of section 7701(a) (42), the taxpayer’s substituted basis, as defined in section 1016(b); if the digital asset is acquired by gift, the basis determined under section 1015; or, if the digital asset is acquired from a decedent, the fair market value of the digital asset at the date of death, unless the alternative valuation date is elected within the meaning of section 1014. When a taxpayer receives digital asset units that constitute gross income under section 61, the taxpayer’s basis in the digital asset units received is generally determined by reference to the amount includable in gross income. See generally § 1.61-2(d)(2)(i). The acquisition date of a digital asset unit must remain with the original basis of that unit.

.04 Acquisition date . The “acquisition date” of a digital asset unit is the date on which the taxpayer acquires, including by purchase, gift, reward, or airdrop, or from a decedent, the unit of the digital asset. If the acquisition is the result of a gift or the death of a decedent, the “acquisition date” is determined under section 1223. The acquisition date of a unit of unused basis is the acquisition date of the digital asset unit to which the unit of unused basis was originally attached.

.05 Pre-2025 transaction . A “pre-2025 transaction” means the sale, disposition, or transfer by the taxpayer of a digital asset unit in a transaction completed before January 1, 2025.

.06 Unhosted wallet . An “unhosted wallet” has the same meaning as in § 1.6045-1(a)(25)(iii) of the 2024 final regulations.

.07 Remaining digital asset units . A “remaining digital asset unit” refers to a digital asset unit that a taxpayer:

(1) acquires or receives in a transfer before January 1, 2025, and

(2) holds in the taxpayer’s wallet or account as of January 1, 2025.

.08 Previously identified and used basis . “Previously identified and used basis” means the original basis (along with the associated acquisition date) of a digital asset unit that was identified and attached to a digital asset unit that was sold, disposed of, or transferred by the taxpayer in a pre-2025 transaction. Thus, for example, previously identified and used basis is reflected in both (1) a digital asset unit purchased for $10 on January 1, 2024, and then sold by the taxpayer before January 1, 2025, treating $10 as the unit’s basis and January 1, 2024, as its acquisition date, and (2) a digital asset unit purchased for $15 on January 30, 2024, and then sold by the taxpayer before January 1, 2025, treating $10 (from another unit) as the unit’s basis and January 1, 2024 (from the other unit), as its acquisition date. In both of these cases, the $10 basis is previously identified and used basis.

.09 Unit of unused basis . “Unit of unused basis” refers to the original, per unit basis of a digital asset unit other than any unit of previously identified and used basis. Accordingly, all units of digital asset basis held by the taxpayer as of January 1, 2025, are treated as units of unused basis for purposes of this revenue procedure, even if the taxpayer is able to factually attribute some units of basis to specific units of digital assets.

.10 As of January 1, 2025 . “As of January 1, 2025” means immediately after the close of the taxpayer’s day on December 31, 2024. .11 Transfer . “Transfer ” means the conveyance, other than a sale or disposition, of digital asset units by one taxpayer to another taxpayer, including a completed

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gift, donation, contribution, or distribution of digital asset units.

.12 Taxpayer . “Taxpayer” means any person described in section 7701(a)(1) but does not include an entity disregarded as an entity separate from its owner under § 301.7701-3. Any remaining digital assets or units of unused basis held by a disregarded entity are treated as held by its owner.