SECTION 5. SNAPSHOT AS OF

JANUARY 1, 2025, AND SAFE HARBOR SCOPE

.01 Safe harbor . The taxpayer may make any reasonable allocation as of January 1, 2025, of units of unused basis to a wallet or account that holds the same number of remaining digital asset units with respect to any type of digital asset for which the taxpayer is relying on this revenue procedure, provided the taxpayer satisfies the requirements of section 4.02 of this revenue procedure.

.02 Reasonable Allocation . To make a reasonable allocation within the meaning of section 5.01 of this revenue procedure, the taxpayer must comply with the requirements set forth in sections 5.02(1) through 5.02(7) of this revenue procedure.

(1) The taxpayer must identify the remaining digital asset units and maintain records sufficient to show the units of

unused basis within the meaning of sections 4.02(4) and 4.02(5) of this revenue procedure, respectively, by the applicable date set forth in section 5.02(4) or 5.02(5) of this revenue procedure.

(2) The taxpayer must complete the allocations of all units of unused basis to the same number of remaining digital asset units within all wallets or accounts held by the taxpayer by the applicable date set forth in section 5.02(4) or 5.02(5) of this revenue procedure. A taxpayer may make such allocations on a specific unit basis or on a global basis.

(a) Specific unit allocation . A taxpayer may make an allocation of specifically identified units of unused basis (specific unit allocation), by reference to characteristics that distinguish those units from other units of unused basis, to either a pool of remaining digital assets units within each wallet or account or, if the taxpayer is able to identify each remaining digital asset within each wallet or account, to the specific units of remaining digital assets within each wallet or account. A specific unit allocation is complete on the date that the taxpayer’s books and records first record the specific characteristics of the units of unused basis allocated to each pool of digital assets in the taxpayer’s wallets or accounts on a wallet-by-wallet or account-by-account basis, or, if the taxpayer is able to identify each remaining digital asset within each wallet or account, to the specific units of remaining digital assets within each wallet or account.

(b) Global allocation . A taxpayer may, alternatively, make an allocation based on a rule prescribing the manner by which units of unused basis will be ordered and then allocated to a pool of remaining digital assets units within each wallet or account (global allocation). A global allocation must identify and order all units of unused basis by reference to characteristics that distinguish those units from all other units of unused basis and must allocate those ordered identified units to a pool of remaining digital asset units in each of the taxpayer’s wallets or accounts on a prescribed basis set forth in the rule. For example, a global allocation might identify those units of unused basis that have the earliest or latest acquisition dates and, for each of those dates, the highest

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or lowest amounts of unused basis, and allocate such units successively to wallet A, wallet B, and wallet C. An allocation that permits the taxpayer to exercise discretion on or after January 1, 2025, with respect to how units of unused basis are allocated to remaining digital asset units or to the taxpayer’s wallets or accounts is not a global allocation within the meaning of this revenue procedure. A global allocation is complete on the date that the taxpayer’s books and records first record the specific characteristics of the units of unused basis allocated to each pool of digital assets in the taxpayer’s wallets or accounts on a wallet-by-wallet or accountby-account basis.

(3) Until such time as the taxpayer has completed the allocations as set forth in section 5.02(4) or 5.02(5)(b) of this revenue procedure, the taxpayer must separately account for any acquisitions or transfers to the taxpayer of digital asset units on or after January 1, 2025, held within the same wallet or account as remaining digital asset units and units of unused basis.

(4) A taxpayer making a specific unit allocation must satisfy the requirements set forth in section 5.02(1) of this revenue procedure and complete the specific unit allocations described in section 5.02(2)(a) of this revenue procedure before the earlier of:

(a) The date and time of the first sale, disposition, or transfer by the taxpayer of the same type of digital asset completed on or after January 1, 2025, or

(b) Either: (i) The due date (including by extension) of the taxpayer’s Federal income tax return or Form 1065, U.S. Return of Partnership Income, for the taxable year that includes January 1, 2025 (the 2025 return); or

(ii) If the taxpayer is not otherwise required to file a 2025 return, the last date for filing the 2025 return (without extensions) of the type of return that would be applicable to the taxpayer if the taxpayer were required to file a 2025 return.

(5) A taxpayer making a global allocation described in section 5.02(2)(b) of this revenue procedure:

(a) Must describe the global allocation method in the taxpayer’s books and records before January 1, 2025;

(b) Must satisfy the requirements set forth in sections 5.02(1) of this revenue procedure and complete the allocations of all units of unused basis to the pools of remaining digital asset units within each of the taxpayer’s wallets or accounts before the later of the dates set forth in section 5.02(4)(a) and (b) of this revenue procedure, as applicable; and

(c) Must comply with the following rules with respect to sales, dispositions or transfers of any remaining digital assets units on or after January 1, 2025. If such sale, disposition or transfer occurs after the taxpayer has completed the global allocation, the taxpayer is permitted to identify the units sold, disposed of, or transferred under § 1.1012-1(j)(2) of the 2024 final regulations (specific identification of digital asset units held in an unhosted wallet) or § 1.1012-1(j)(3) (ii) of the 2024 final regulations (adequate identification of units held in the custody of a broker). If such sale, disposition or transfer occurs before the taxpayer has completed the global allocation, the taxpayer may make a specific identification (or adequate identification) of any remaining digital asset units that are sold, disposed of, or transferred only by using a standing order or instruction communicated to the taxpayer’s broker or a standing instruction recorded in the taxpayer’s books and records. This standing order must be applied to select any remaining digital asset units sold, disposed of, or transferred after the global allocation is complete. Any other type of specifiic identification by the taxpayer will not be treated as sufficient to identify any remaining digital asset units sold, disposed of, or transferred under § 1.1012-1(j)(2) of the 2024 final regulations (specific identification of digital asset units held in an unhosted wallet) or § 1.1012-1(j)(3)(ii) of the 2024 final regulations (adequate identification of units held in the custody of a broker) before the date that the taxpayer has completed the allocation of units of unused basis to the pools of remaining digital asset units within each of the taxpayer’s wallets or accounts.

(6) The determination of whether a taxpayer’s allocations to wallets or accounts is reasonable with respect to one type of digital asset held by the tax

payer prior to January 1, 2025, does not impact whether the taxpayer’s allocations to other wallets or accounts is reasonable with respect to another type of digital asset held by the taxpayer prior to January 1, 2025.

(7) Any allocation of previously identified and used basis to digital assets held by the taxpayer as of January 1, 2025, does not constitute a reasonable allocation.

.03 Failure to Comply. If a taxpayer makes a reasonable allocation described in section 5.02 of this revenue procedure but fails to comply with the requirements of section 4.02 of this revenue procedure, the taxpayer cannot rely on the safe harbor set forth in this revenue procedure, and such failure may result in the assessment of additional tax, penalties, and interest.

.04 Not applicable to determining amount of basis . This safe harbor does not apply to the taxpayer’s calculation of the amount of unused basis, which must be substantiated separately by the taxpayer pursuant to section 6001.