Start with the allocation record you kept

The question is not what you should have done in 2024. It is what your files can show about what you did.

Work the branches below against the folder, drive, or email archive where your 2024 and 2025 crypto paperwork lives. Each ending is an evidence check, not a verdict on whether the safe harbor protects you.

Can your records support the allocation you used?

  1. Before 2025, did you treat units across more than one wallet or exchange account as a single pool for basis purposes?
    • No, and you held everything in one account the whole time → the transition allocation had little to assign; confirm the single-account inventory as of January 1, 2025 and move to the ongoing ledger.
    • Yes, or you are not sure → continue.
  2. Can you name the approach you used: a unit-by-unit allocation across specific wallets, or a global method applied to everything?
    • Yes → continue to step 3.
    • No → retrieve the missing allocation evidence. Look for a spreadsheet version history, a dated export, or correspondence with whoever helped you.
  3. Is there a record showing when the choice was made and when the allocation was finished, with a date that came from the moment itself?
  4. For each asset type you held, can you identify the first sale, disposition, or transfer of that same asset type after January 1, 2025?
    • Yes → compare records with the applicable rule using the timing table in the next section.
    • No → prepare an adviser packet. The deadline is asset-specific, so an unresolved date on one asset does not contaminate the others.

Your transition evidence packet

Build this as a single dated folder. Nothing here is an IRS form, and assembling it does not grant safe-harbor protection; it is the set of documents any competent reviewer will ask for first.

  • Wallet and account inventory as of January 1, 2025, listing every unhosted wallet and every custodial account, with unit quantities
  • Unused-basis records for those units, plus the underlying source evidence (purchase confirmations, bank debits, prior-year schedules)
  • The allocation approach you used, named in plain words
  • A date-stamped record of the method, where a global method was used, created before January 1, 2025
  • The completion record: the finished allocation itself, with whatever fixes its date
  • For each asset type, the first post-January 1, 2025 sale, disposition, or transfer, with its date
  • The applicable return due date covering January 1, 2025, and any extension evidence if a return was required
  • The resulting allocation, carried forward into the ledger you use today
  • Separately: your current sale-lot method. This is not the historical allocation approach, and storing it in the same field is how the two get confused.

Compare the two allocation deadlines

Two different deadline shapes sit inside one revenue procedure, and they run in opposite directions. Rev. Proc.

2024-28, § 5.02(4) requires a specific-unit allocation to be completed before the earlier of the first post-January 1, 2025 sale, disposition, or transfer of the same asset type and the applicable due date for the return covering January 1, 2025, including extensions where a return is required.

Under § 5.02(5), a global allocation method had to be recorded before January 1, 2025, and the allocation itself completed before the later of those same two events, with additional interim identification rules applying if a transaction happened before completion (current figure at the IRS).

That first trigger is asset-specific. Selling ETH in February 2025 did not start the clock on your BTC lots.

Specific-unit allocation Global allocation
Method-record timing No separate advance method record required; the allocation itself carries the timing Method had to be recorded before January 1, 2025
Allocation-completion trigger Before the earlier of: the first post-January 1, 2025 sale, disposition, or transfer of the same asset type, or the applicable due date of the return covering January 1, 2025 (including extensions where a return is required) Before the later of those same two events; interim identification rules apply to any transaction occurring before completion
Reversibility Irrevocable once made Irrevocable once made
Documentation to inspect The dated allocation output; per-asset transaction dates; return due date and extension evidence. Records of the allocation, not proof of the basis amounts The pre-2025 method record with its original date; the dated completion record; interim identification for any earlier 2025 transaction; per-asset transaction dates. Again, allocation records are separate from basis substantiation

Source: Rev. Proc. 2024-28 § 5.02.

The table explains what the two approaches required at the time. It is not a menu to pick from now.

What changed on January 1, 2025?

Before 2025, plenty of holders ran one pooled basis ledger across four exchanges and a hardware wallet, picked lots from that pool, and never thought about which account a unit sat in. The separate wallet and account identification rules in Treas. Reg. § 1.1012-1(h) and (j) apply to acquisitions and dispositions on or after January 1, 2025.

Rev. Proc. 2024-28, §§ 1 and 5 permits a reasonable allocation of unused digital-asset basis to units held in each wallet or account as of that date.

Three things are worth keeping apart. The revenue procedure is a one-time transition safe harbor, not the source of the ongoing rule and not an annual election you renew. Rev.

Proc. 2024-28 §§ 4-5 governs the allocation under IRC § 1012(c)(1), while Treas. Reg. § 1.1012-1(j) governs the identification and FIFO rules that keep applying to every later disposition.

Form 1099-DA instructions govern what brokers report to you and the IRS; they do not set your safe-harbor allocation deadline.

Whether your own asset-specific completion deadline has already passed depends on your transaction dates, not on the calendar alone.

Your allocation is irrevocable; your basis still needs proof

An allocation made under the safe harbor is irrevocable once made. If the split you chose turned out to be unfavorable, there is no redo provision to reach for, and generating a new allocation document today does not replace the one you made.

The subtler point is what the allocation does and does not prove. It assigns unused basis to units in particular wallets. It does not substantiate the basis amount itself; that still requires separate records, and IRC § 6001 puts the substantiation duty on you.

Here is the failure mode we see described most often, stated as a document check rather than any tax outcome: a holder prints an allocation report from their tracking software in 2026, and the printout has a 2026 date on it.

It might reflect a choice made in December 2024 perfectly well. The printout cannot show that.

What shows timing is the artifact created at the time - a spreadsheet's file metadata and version history, an email attachment with a server timestamp, an export whose filename and contents match a 2024 transaction set.

The same applies to a software toggle. A lot-method setting inside an app describes how the app picks lots for sales. It is not a record of the historical allocation approach, even if the app's vendor changed the label between releases.

Records should show when something actually happened. Recreating a document to fit the answer you want is a different exercise, and not one this site will help with.

If a timely allocation cannot be shown

Failing to satisfy the revenue procedure's requirements forfeits the safe harbor, and that can result in additional tax, penalties, and interest. It does not foreclose substantiating your basis by other means. Those are two separate questions, and conflating them tends to make the situation look worse than the records support.

So inventory what survived. Name the specific gap: a missing method-record date, no completion artifact, an unknown first transaction date for one asset type, absent extension evidence. A gap you can name is a gap an appropriately licensed adviser can price and address; "my 2024 records are a mess" is not.

One related warning, because it comes up in the same conversation: a blank Box 1g on a Form 1099-DA means basis was not reported, and it does not by itself establish that your basis is zero - you determine the accurate figure from your own records (check a blank or zero basis entry).

For the underlying evidence work, rebuild the records behind an old allocation. Nothing here guarantees IRS acceptance of a reconstructed position, and no checklist makes a packet audit-proof.

Keep each wallet's basis history separate going forward

IRC § 1012(c)(1) and the final Treas.

Reg. § 1.1012-1(j) apply basis-identification conventions to digital-asset dispositions on or after January 1, 2025 on an account-by-account basis rather than pooled across your wallets and exchanges.

Section 1.1012-1(j)(2) covers identification for unhosted wallets; § 1.1012-1(j)(3) covers assets held in broker custody. Separately, Rev. Proc.

2024-28 § 4.02(4)-(5) required the wallet and account inventory and the unused-basis records for the transition safe harbor itself. The revenue procedure did not create a general ongoing per-wallet recordkeeping regulation.

Does an older lot sitting in a different wallet matter when you sell? For identifying which units left the selling account, no - an unrelated older lot elsewhere does not pull everything back into one global pool. If units moved into that selling account at some point, though, their transfer history belongs in that account's records, because that is where their basis came from.

Practically, the packet from the first section becomes the opening balance of your per-account ledger. Each account then carries its own acquisition dates, quantities, and basis forward from January 1, 2025. One ledger per account, and transfers recorded on both sides.

We have watched one transfer between two exchanges arrive with no history attached, and the receiving platform had nothing to show for where those units came from - the sending side's export was the only thing tying the units to a purchase.

That is the whole argument for keeping transfer documentation inside the receiving account's file rather than trusting the platform to carry it.

Separate your allocation check from your next sale-lot choice

These are two different jobs, and readers who merge them end up auditing the wrong thing. The 2024-28 allocation was a one-time assignment of unused basis to the units sitting in each wallet and account as of January 1, 2025. Choosing which lot you sell, this month or next, is an ongoing decision governed by the identification rules in Treas.

Reg. § 1.1012-1(j). A change to the second does not rewrite the first, and the first does not lock you into a lot-selection habit.

For the mechanics of picking lots, separate wallet allocation from choosing a sale lot and work through that article instead of trying to reverse-engineer the answer from an old allocation file.

Your next step depends on which line of the packet is empty:

  • Missing the wallet inventory as of January 1, 2025 → rebuild it from account statements and on-chain balances at that date before touching anything else.
  • Have the allocation output but nothing fixing its date → hunt for the original artifact (file metadata, sent mail, cloud version history) rather than reprinting the report.
  • Have the allocation but thin evidence for the basis amounts underneath → that is a substantiation problem, and it is separate from the safe harbor.
  • Have a complete, dated allocation and per-asset transaction dates → file the packet with your current per-account ledger and stop reopening it.

None of these endings certifies a tax result. They tell you which conversation to have next, and with whom.

Do this now: save the completed transition evidence packet as one dated folder, write down the single document or date that is missing, then follow the route that fits the gap - reconstruction for missing underlying evidence, lot-method mechanics for going-forward sales.

If the gap involves individualized treatment, hand the packet to an appropriately licensed adviser. You can also return to the 1099-DA guide index for the rest of the series.

Sources

  • IRS, Revenue Procedure 2024-28, 2024-31 I.R.B. 326, §§ 1, 4-5, especially § 4.02(4)-(5) and § 5.02(4)-(5) - irs.gov/pub/irs-drop/rp-24-28.pdf. Issued June 28, 2024. Supports the allocation, documentation, timing, and irrevocability discussion, anchored to January 1, 2025.
  • Department of the Treasury, T.D. 10000, 89 FR 56480; Treas. Reg. § 1.1012-1(h) and (j) - federalregister.gov. Published July 9, 2024. Supports the separation of the standing wallet and account identification rule from the transition revenue procedure.
  • IRS, Form 1099-DA recipient instructions, Box 1g - irs.gov/pub/irs-access/f1099da_accessible.pdf. Supports the blank-basis warning only.