SECTION 2. BACKGROUND

Section 1012(c)(1) provides that, in the case of the sale, exchange, or other disposition of a specified security on or after the applicable date, the conventions prescribed by regulations under that section must be applied on an account-by-account basis. Section 1012(c)(3) provides that, for purposes of section 1012, the terms “specified security” and “applicable date” have the same definitions given to those terms in section 6045(g)(3). Section 80603 of the Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, 135 Stat. 429, 1339 (2021), expanded the definition of a specified security in section 6045(g)(3) to include digital assets. Section 80603 had an applicable date of January 1, 2023. Section 6045(g)(3)(D) generally defines a digital asset, for purposes of information reporting by brokers, as any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.

On August 29, 2023, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS)

published in the Federal Register (88 FR 59576) proposed regulations (2023 proposed regulations) under sections 6045, 1001, 1012, and other sections of the Code. The 2023 proposed regulations, in part, would have clarified the statutory requirements for determining and identifying the cost basis of digital assets. Consistent with section 1012(c), the proposed regulations would have required basis determinations on an account-byaccount basis.

On July 9, 2024, the Treasury Department and the IRS published in the Federal Register (89 FR 56480) T.D. 10000 (final regulations). Section 1.1012-1(j) of the final regulations provides ordering rules for determining which units of the same digital asset should be treated as sold, disposed of, or transferred when a taxpayer holds multiple units of that same digital asset within the same wallet that were acquired on different dates or at different prices. Paragraph (j) generally applies separate rules depending on whether or not the units are held by the taxpayer in the custody of a broker.

For digital asset units held in the custody of a taxpayer’s broker, § 1.1012-1(j) (3)(ii) generally permits a taxpayer to make an adequate identification of the units to be sold, disposed of, or transferred. Adequate identification is made if, no later than the date and time of the sale, disposition, or transfer, the taxpayer specifies to the custodial broker with custody of the digital assets the particular units of the digital asset to be sold, disposed of, or transferred. The taxpayer may identify units by reference to any identifier, such as purchase date and time or purchase price, that the broker designates as sufficiently specific to identify the units sold, disposed of, or transferred. Section 1.1012-1(j)(3)(ii) also permits taxpayers to make an adequate identification of such units by using a standing order or instruction communicated to their custodial broker. Further, if the custodial broker offers taxpayers only one method of making a specific identification—for example, by the earliest date on which units of the same digital asset were

1 Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code (Code) or the Income Tax Regulations (26 CFR part 1).

April 6, 2026 800 Bulletin No. 2026–15

tion is reasonable. Rev. Proc. 2024-28 permits taxpayers either to make a specific unit allocation or to make a global allocation in order to allocate units of unattached basis, subject to various conditions. For each type of digital asset, the allocation generally is required to be completed by the date of the first sale of that type of digital asset on or after January 1, 2025.

In response to concerns expressed by some custodial brokers, the IRS issued Notice 2025-7, which temporarily allows taxpayers to use additional methods for making an adequate identification within the meaning of § 1.1012-1(j)(3) (ii). Notice 2025-7 provides that, during calendar year 2025, which the notice refers to as the relief period, taxpayers can make adequate identifications of units of digital assets sold, disposed of, or transferred from the taxpayer’s units held in the custody of a broker by identifying the particular units or recording a standing order in the taxpayer’s books and records, temporarily relieving taxpayers of the requirement in § 1.10121(j)(3)(ii) to communicate identifications to the broker. The notice also provides that if a taxpayer makes an adequate identification under the notice, the rule in § 1.1012-1(j)(3)(ii), which treats taxpayers whose broker offers only one method of making a specific identification as having made a standing order or instruction, does not apply. Taxpayers relying on the safe harbor under Rev. Proc. 2024-28 can rely on the temporary relief in the notice only after the requirements of Rev. Proc. 2024-28 have been satisfied. The temporary relief described in Notice 2025-7 does not apply to digital asset units not held in the custody of a broker.

Certain digital asset custodial brokers have informed the Treasury Department and the IRS that they have built and implemented systems and procedures to report gross proceeds for digital asset transactions carried out in 2025 and will report those transactions to the IRS and customers in 2026, and that those brokers also have made good faith efforts to build and implement systems and procedures that will enable those brokers to accept and process specific identification or standing order instructions from customers in 2026. The Treasury Department

and the IRS understand that many custodial brokers have substantially completed much of the work necessary to accept specific identifications from customers but are not currently ready to accept specific identifications (other than standing orders) from customers. Notwithstanding the temporary relief provided in Notice 2025-7, some of those custodial brokers do not have in place the technology needed to accept specific instructions communicated by taxpayers but are expected to complete building and implementing the systems necessary to do so during 2026. Consequently, some taxpayers may be temporarily unable to make adequate identifications in conformity with § 1.1012-1(j)(3)(ii), with the result that any units in the custody of such brokers that are sold, disposed of, or transferred before the necessary systems are in place would be determined under the FIFO rule without further temporary relief. To avoid this result, this notice extends the relief period specified in Notice 2025-7 through December 31, 2026. This notice extends the temporary relief provided by Notice 2025-7, allowing taxpayers to use additional methods for making an adequate identification within the meaning of § 1.1012-1(j)(3) (ii) during the relief period, as defined in section 3.03 of this notice. This notice does not prohibit taxpayers from complying with the requirements of § 1.10121(j)(3)(ii). In addition, this notice does not affect how the safe harbor described in Rev. Proc. 2024-28 applies and does not affect the requirement for brokers to report gross proceeds on the Form 1099DA beginning in 2025. Taxpayers relying on the safe harbor described in Rev. Proc. 2024-28 may also rely on the temporary relief described in section 4.02 of this notice once the applicable requirements of Rev. Proc. 2024-28 have been satisfied, including, in the case of taxpayers making a global allocation, the completion of the global allocation.

A method of specifically identifying the units of a digital asset sold, disposed of, or transferred (for example, by the earliest acquired, the latest acquired, or the highest basis) is not a method of accounting to which section 446 or section 481 apply. See § 1.1012-1(j)(4).

As with the temporary relief provided in Notice 2025-7, the temporary relief described in this notice does not apply for purposes of the § 1.6045-1 information reporting rules for digital assets. Consequently, for 2026 transactions, the acquisition date and basis reported by a broker to a taxpayer with respect to a sale, disposition or transfer of digital assets may not match the lot identification and basis of that sale, disposition or transfer on the taxpayer’s books and records. Similarly, as with the temporary relief provided in Notice 2025-7, the relief provided under this notice does not apply to digital asset units not held in the custody of a broker.