Treasury regulations have required wallet-by-wallet accounting for every crypto purchase and sale since January 1, 2025. When you sell part of a holding, the units sold come from that wallet or account alone. Their basis and holding period go with them. Units of the same coin held elsewhere do not count.
Before 2025, many people pooled all their wallets, reading the IRS FAQs as allowing it. Rev. Proc. 2024-28 calls that the universal or multi-wallet approach. From 2025 the regulation governs, even though the IRS FAQs still state first in, first out without limiting it to one wallet.
Rev. Proc. 2024-28 gave a one-time safe harbor for the switch to wallet-by-wallet accounting. A safe harbor is a method the IRS agrees to accept. This one let you assign the basis of coins held on January 1, 2025 to the wallets and accounts holding them.
The safe harbor offered two methods, each with its own deadline. A specific-unit allocation assigns basis to particular units in each wallet or account. It must be recorded before your first sale or transfer of that coin in 2025 or later. It must also be recorded by your 2025 return’s due date, with extensions. A global allocation assigns basis by a rule instead, and it had to be written into your records before January 1, 2025.
Sources
- IRS, Rev. Proc. 2024-28 (allocating basis in digital assets to wallets or accounts as of January 1, 2025)
- 26 C.F.R. § 1.1012-1, Basis of property
- IRS, Frequently asked questions on virtual currency transactions
Reviewed and updated September 2026. General information, not advice for your situation.