Safe Harbor Allocation Updates
The final step to comply with the safe harbor in Revenue Procedure 2024-28 is to allocate your unused cost basis to your actual holdings on 12/31/2024.
Why This Matters
The safe harbor allocation allows taxpayers to transition from the universal accounting methods to the IRS-prescribed by-account/by-wallet method starting 1/1/2025.Â
Key Deadlines You Can’t Ignore:
- The allocation must be completed before you file your 2025 tax return on October 15th, 2026.Â
- This means it must be done before the 2025 transactions can be reconciled.Â
- The final allocation will be a report that shows all owned tokens, their cost basis, purchase date, and the associated wallet/account on 12/31/2024.
This report will act as the starting point for reconciling the 2025 transactions.
CryptoTaxAudit can complete the allocation for you.
We would need the following information to complete the allocation.

A closing Position Report as of 12/31/2024 showing the tokens, token amount, purchase date, and cost basis.

The inventory snapshots as of 12/31/2024 showing the digital asset balances in your accounts and wallets.
Don't have a closing position report, or don't know what it is?
A closing position report will show all the cryptocurrencies that you held at the end of the year, the amounts of each cryptocurrency, the date purchased, and the cost basis. It shows in detail each tax lot.
It should be dated 12/31/2024 for the allocation.
Most crypto tax software doesn’t support this report. Let us handle the reconciliation for you and generate an accurate report—contact us today for expert assistance!
Talk to an ExpertWhat you need to do immediately to protect yourself
You need to adopt a Safe Harbor Allocation Plan. As experts in crypto taxation, we have developed an optimal plan that all traders can use.
It is free and without obligations and meets all the IRS requirements.Â
By adopting the plan, you create a formal, date-stamped, and signed document for your personal records. However, you must adopt a plan by December 31, 2024, so do not wait.Â
Here is the timeline of the upcoming changes
IRS Safe Harbor Transitional Relief
The IRS provides transitional relief via Revenue Procedure 2024-28, allowing taxpayers to allocate unused cost basis for digital assets as of January 1st, 2025.
Taxpayers must take a snapshot of account balances and decide on an allocation method—Specific Unit Allocation or Global Allocation—before January 1st, 2025, to avoid penalties.
The Specific Unit Allocation must be made before January 1st, 2025, or before the first sale, disposition or transfer of crypto assets completed on or after January 1st, 2025.
A method using the Global Allocation rules must be chosen before January 1st, 2025, but can be applied afterwards.
Act Before January 1st, 2025
If the Specific Unit Allocation is used, taxpayers must:
- Reconcile your crypto transactions up through December 31st, 2024,
- Take a snapshot of your account balances on December 31st, 2024, with timestamps.
- Allocate the units of unused cost basis to your holdings before January 1st, 2025, or before the first sale, disposition or transfer of crypto assets completed on or after January 1st, 2025.
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Many taxpayers may not be able to use the Specific Unit Allocation, thus defaulting to the Global Allocation.
The following actions are required for the Global Allocation:
- Agree to a reasonable Global Allocation method before January 1st, 2025 and save it to your books and records.
- Inventory Your Crypto Assets: Take a snapshot of your account balances on December 31st, 2024, with timestamps.
Ready to take your inventory snapshot?
Read our step-by-step guide on how to take your inventory snapshot after enrolling in the Safe Harbor Allocation Plan.Â
Get Your Inventory Snapshot Guide Now