In July 2024, the IRS issued Revenue Procedure 2024-28 (Rev. Proc. 2024-28). This procedure makes it mandatory for US crypto investors to use a per-wallet cost-basis tracking method when calculating gains and losses for tax purposes starting January 1, 2025. The universal cost basis tracking method will no longer be allowed beginning in tax year 2025. Learn more about what this means HERE.

In order to comply with these new IRS regulations, CoinLedger needs to allocate the outstanding cost basis of your holdings to the specific accounts (wallets/exchanges) you hold crypto in. This will enable CoinLedger to calculate your gains/losses on a per-wallet basis in the future.

To facilitate users with this migration, CoinLedger will automatically allocate any outstanding basis to your wallets based on a Lowest-Cost, Highest-Wallet method. Note that your account will automatically default to lowest-cost, highest-wallet allocation, and that no further action is required of you if you would like to stick with this method. CoinLedger will also provide support for Highest-Cost, Highest-Wallet reallocation, and switching to this method can be done from your account settings. Learn more about how to do so below.

On Jan 1st, 2025, CoinLedger will automatically reallocate your cost basis using lowest-cost, highest-wallet, in compliance with IRS Revenue Procedure 2024-28. However, you can change your method if you desire through the steps below.

Step 1

Head to your Tax Settings page by selecting the profile picture in the top right corner of your CoinLedger account.

Step 2

Once you've navigated to Tax Settings, scroll down to the IRS Revenue Procedure 2024-28 section, as shown below.

Step 3

Note that your account will default to lowest-cost, highest-wallet allocation, and that no further action is required of you if you would like to stick with this method. On Jan 1st, 2025, CoinLedger will automatically reallocate your cost basis using lowest-cost, highest-wallet, in compliance with IRS Revenue Procedure 2024-28.

However, if you wish to switch your reallocation method to highest-cost, highest wallet, you can do so using the drop-down menu below. Once you select a new method, CoinLedger will follow that method when reallocating your cost basis.

WARNING: By selecting Opt out, you are choosing to continue using CoinLedger with the universal cost basis tracking method. This method is no longer allowed to be used in the United States after Jan 1, 2025. Therefore, selecting Opt out on this screen is not recommended. Learn more about universal vs per-wallet cost basis tracking HERE.

CoinLedger will be defaulting all US users to use the lowest-cost, highest-wallet allocation method. In addition to lowest-cost, highest-wallet, CoinLedger also supports highest-cost, highest-wallet.

If you hold most of your crypto in a cold storage wallet, using the lowest-cost, highest-wallet method (default) will allocate your lowest cost basis coins to that cold wallet. This can be helpful for qualifying for long-term capital gains and minimizing your tax burden.

There may be circumstances where you want to allocate your highest cost coins to your highest balance wallets. This method is also supported, but it is not the default method. You should select which method you want CoinLedger to use on your account before Jan 1, 2025. You can do this by making this selection within the Tax Settings of your CoinLedger account. By default, USA users will be selected to use the lowest-cost, highest-wallet method.

Consult your tax professional if you have questions about which reallocation method is best for your specific circumstances. For more information or questions about IRS Revenue Procedure 2024-28, please see this comprehensive breakdown on our site.