SECTION 6. EXAMPLES

The following examples illustrate the application of this revenue procedure to a single type of digital asset (referred to as digital asset DE). For purposes of these examples, no transaction fees are paid or incurred to effect the purchase or sale of any of the digital asset units, and neither the number of remaining digital asset units nor the units of unused basis is under consideration before any court of the United States or the IRS Independent Office of Appeals, or subject to an examination by the IRS.

.01 Example 1. (1) Facts . B, an individual and calendar year taxpayer, holds in B’s unhosted wallet (“XYZ Wallet”) 10 units of digital asset DE that B acquired for $1 per unit on July 1, 2019. B holds in a second unhosted wallet (“GHI Wallet”) 20 units of digital asset DE acquired on September 1, 2020, for $5 per unit. On December 1, 2024, B sells all 30 units of digital asset DE in a transaction completed before January 1, 2025. (2) Analysis . Neither the 10 units of digital asset DE acquired on July 1, 2019, nor the 20 units of digital asset DE acquired on September 1, 2020, are remaining digital asset units within the meaning of section 3.07 of this revenue procedure, because B does not hold any digital asset units of DE as of January 1, 2025. Accordingly, B may not make allocations described in section 5.02 of this revenue

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procedure to determine the basis of the units from either lot.

.02 Example 2 . (1) Facts . The facts are the same as in Example 1 except that B sells only six units from B’s XYZ Wallet on December 1, 2024, and B maintain records sufficient to show that B specifically identified and attached the original basis of six units from the 20 units acquired on September 1, 2020, in B’s GHI Wallet as the six units sold. As of January 1, 2025, B has 24 remaining digital asset units and 24 units of unused basis.

(2) Analysis . (a) B’s sale of six units from B’s XYZ wallet on December 1, 2024, is a pre-2025 transaction with previously identified and used basis of $30 (6 units each with a per unit basis of $5). As of January 1, 2025, B has 24 units of unused basis (consisting of 10 units of unused basis in the amount of $1 per unit with an acquisition date of July 1, 2019, originally from B’s XYZ Wallet, and 14 units of unused basis in the amount of $5 per unit with an acquisition date of September 1, 2020, originally from B’s GHI Wallet). B also has 24 remaining digital asset units (consisting of four DE remaining digital asset units in B’s XYZ Wallet and 20 remaining digital asset units in B’s GHI Wallet).

(b) B may use the safe harbor described in section 5.02 of this revenue procedure to make a reasonable allocation of B’s 24 units of unused basis to the pool of remaining digital asset units in B’s XYZ and GHI Wallets as of January 1, 2025, provided that B maintains records sufficient to show the units of unused basis and completes the allocations by the dates set forth in sections 5.02(4) (specific unit allocation) or 5.02(5)(b) (global allocation) of this revenue procedure, as applicable.

.03 Example 3 . (1) Facts . The facts are the same as in Example 2. In addition, on March 1, 2025, B sells two units from B’s XYZ Wallet. Before B’s sale of those two units from B’s XYZ Wallet on March 1, 2025, B identifies and maintains records sufficient to show that B has four remaining digital asset units in B’s XYZ Wallet and 20 remaining digital asset units in B’s GHI Wallet. B’s records also show that B has 10 units of unused basis in the amount of $1 per unit with an acquisition date of July 1, 2019, and 14 units of unused basis in the amount of $5 per unit with an acquisition date of September 1, 2020. Also, before B’s sale of the two units from B’s XYZ wallet, B makes a specific unit allocation, of two units of unused basis in the amount of $1 per unit and an acquisition date of July 1, 2019, and two units of unused basis in the amount of $5 per unit and an acquisition date of September 1, 2020, to the pool of four remaining digital asset units held in B’s XYZ Wallet. B allocates the remainder of the eight units of unused basis (in the amount of $1 per unit and an acquisition date of July 1, 2019), and the 12 units of unused basis (in the amount of $5 per unit and an acquisition date of September 1, 2020) to the pool of 20 remaining digital asset units held in B’s GHI Wallet. Prior to B’s sale of the two units from B’s XYZ Wallet, B specifically identifies in B’s books and records that one of the units sold was from one unit of unused

basis in the amount of $1 per unit with an acquisition date of July 1, 2019, and the other unit sold was from one unit of unused basis in the amount of $5 per unit with an acquisition date of September 1, 2020. (2) Analysis . (a) B made a specific unit allocation as described in section 5.02(2)(a) of this revenue procedure.

(b) B’s specific unit allocation is reasonable within the meaning of section 5.02 of this revenue procedure for the following reasons:

(i) B identified and maintained records sufficient to show the number of remaining digital asset units in B’s XYZ and GHI Wallets as required by section 5.02(1) of this revenue procedure. (ii) B identified and maintained records sufficient to show the number of units of unused basis, the amount of each such unit, and the acquisition date of the digital asset unit to which the unit of unused basis was originally attached as required by section 5.02(1) of this revenue procedure. (iii) B’s allocation of units of unused basis to the XYZ and GHI Wallets was made by reference to the original, per unit basis and acquisition date of the digital asset unit to which the unit of unused basis was originally attached. This reference is to characteristics that distinguish those units of unused basis from B’s other units of unused basis. B’s specific unit allocations were completed before March 1, 2025, which is the date and time of the taxpayer’s first sale of the digital asset units completed on or after January 1, 2025, as required by section 5.02(4)(a) of this revenue procedure.

(iv) B did not allocate any previously identified and used basis to the remaining digital asset units.

(c) B’s identification of the two units sold on March 1, 2025, is a specific identification under § 1.1012-1(j)(2) of the 2024 final regulations. .04 Example 4 . (1) Facts . The facts are the same as in Example 3, except B does not make a specific unit allocation. Instead, before January 1, 2025, B describes an ordering rule in B’s books and records, which identifies and orders the units of unused basis in a manner that is based first on the highest basis units and second (if there are multiple units with the same basis) on the units with the earliest acquisition dates. B’s ordering rule also directs that these ordered units of unused basis will be allocated first to the remaining digital asset units in B’s XYZ Wallet and then to the remaining digital asset units in B’s GHI Wallet. Additionally, B identifies and maintains records sufficient to show B’s 24 remaining digital asset units and B’s 24 units of unused basis as of January 1, 2025, respectively, before April 15, 2026, which is the due date for filing B’s Federal income tax return for B’s 2025 taxable year. B also completes the allocations of units of unused basis to remaining digital assets after March 1, 2025, but before April 15, 2026, such that B’s books and records record the specific characteristics of the units of unused basis allocated to each pool of digital assets in B’s wallets or accounts on a wallet-by-wallet or account-by-account basis. Finally, instead of selling the two units from B’s XYZ Wallet, B sells the two units from B’s GHI Wallet. Prior to B’s sale of the two units from B’s

GHI Wallet, B specifically identifies in B’s books and records that one of the units sold was from one unit of unused basis in the amount of $1 per unit with an acquisition date of July 1, 2019, and the other unit sold was from one unit of unused basis in the amount of $5 per unit with an acquisition date of September 1, 2020.

(2) Analysis . (a) B’s ordering rule is a global allocation as described in section 5.02(2)(b) of this revenue procedure. This global allocation when completed results in: four of the 14 units of unused basis with the highest basis (the units with a basis in the amount of $5 per unit) have been allocated to the pool of remaining digital asset units held in B’s XYZ Wallet and 10 units of unused basis (the units with a basis in the amount of $5 per unit) and 10 units of unused basis (the units with basis in the amount of $1 per unit) have been allocated to the pool of remaining digital asset units held in B’s GHI Wallet.

(b) B’s global allocation as described in section 5.02(2)(b) of this revenue procedure is reasonable within the meaning of section 5.02 of this revenue procedure for the following reasons:

(i) B identified and maintained records sufficient to show the number of remaining digital asset units in B’s XYZ and GHI Wallets as required by section 5.02(1) of this revenue procedure. (ii) B identified and maintained records sufficient to show the number of units of unused basis, the amount of each such unit, and the acquisition date of the digital asset unit to which the unused basis was originally attached as required by section 5.02(1) of this revenue procedure.

(iii) B’s global allocation applies a rule that identifies and orders the units of unused basis by reference first to the highest basis units and second to the units with the earliest acquisition dates. These characteristics are sufficient to distinguish each of the units from the other units of unused basis. B’s global allocation then allocates the ordered units of unused basis to a pool of remaining digital asset units in each of B’s XYZ and GHI Wallets on a prescribed basis. B’s global allocation does not permit B to exercise discretion on or after January 1, 2025, with respect to how the units of unused basis are allocated to B’s remaining digital assets or to its XYZ and GHI Wallets.

(iv) B described the global allocation method in B’s books and records before January 1, 2025.

(v) B did not allocate any previously identified and used basis to the remaining digital asset units.

(c) Under section 5.02(5)(c) of this revenue procedure, a global allocation must be completed before a taxpayer is permitted to make a specific identification of units sold on or after January 1, 2025, other than by reference to a standing order or instruction. B did not complete its global allocation prior to March 1, 2025. Additionally, B’s identification of the units sold on March 1, 2025, was based on the amount (and acquisition date) of specific units of unused basis before the global allocation was complete, and the identification was not a standing instruction. Therefore, B’s specific identification of the units sold on March 1, 2025, will not be treated as sufficient to identify the units

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sold within the meaning of § 1.1012-1(j)(2) of the 2024 final regulations. Instead, under § 1.1012-1(j) (1) of the 2024 final regulations, B must treat the units with the earliest acquisition dates within B’s GHI Wallet as sold. Accordingly, the two units that B must treat as sold are the two units with unused basis in the amount of $1 per unit with acquisition dates of July 1, 2019.

.05 Example 5 . (1) Facts . The facts are the same as in Example 4, except instead of selling two digital asset units on March 1, 2025, B transfers those two units to a family member, C, as a completed gift.

(2) Analysis . The analysis set forth in Example 4 remains the same. Accordingly, the 2 units transferred by B to C on March 1, 2025, are the two units with unused basis in the amount of $1 per unit with acquisition dates of July 1, 2019.