How to Comply with Revenue Procedure 2024-18

• What’s Changing: Overview of Rev. Proc. 2024-28 and new IRS requirements for crypto reporting.
• Why It Matters: Understanding the January 1, 2025, compliance deadline and its impact.
• What You Need to Decide: Key considerations for transitioning your cost basis methodology.
• How Cryptoworth Helps: Tools and strategies to simplify compliance and streamline operations.

What Is Revenue Procedure 2024-28?

Richard Pasquin (RP): Revenue Procedure 2024-28 introduces new IRS requirements for crypto companies. It mandates the adoption of account-based or connection-based cost basis methodologies for reporting cryptocurrency transactions. This replaces the universal methodology previously used by most companies.

Why Is It Important Now?

RP: “Why is this important now? Because these rules are coming into effect as of January 1, 2025.” That leaves very little time for companies to ensure compliance. Failing to act now could lead to audits, penalties, and significant operational disruptions.

Who Should Pay Attention to This Topic?

RP: This is critical for accountants, financial controllers, and businesses in the crypto and Web3 space. Anyone involved in managing crypto transactions, especially companies based in the United States, must prepare for this shift to ensure they meet IRS requirements.

What Are the Key Differences in Methodologies?

RP: Universal cost basis methodologies aggregate all transactions across wallets and exchanges. The new rules require companies to report based on either account-based or connection-based methodologies.

• Account-based tracks activity tied to specific accounts.
• Connection-based focuses on individual wallets or exchanges.

The change ensures greater accuracy and transparency but requires updates to existing processes.

What Are the Two Transition Options?

RP: There are two main ways to adapt to the new rules:

1. Continue with Your Current Ledger or Workspace
   • Recalculate cost basis at the connection level.
   • Export updated data.
   • Lock transactions for compliance.
2. Start Fresh with a New Ledger or Workspace
   • Set up a new ledger.
   • Ensure all historical data aligns with the new methodology.
   • Begin a clean slate from January 1, 2025.

Each approach has benefits, depending on your company’s needs.

How Can Cryptoworth Simplify the Transition?

RP: Cryptoworth provides tools that make the transition seamless. For example:

• You can switch to the new cost basis methodology in just a few clicks.
• Recalculate cost basis at the connection level.
• Lock historical data for IRS compliance.
• Import and export data between workspaces to ensure continuity.

These features streamline the entire process, reducing complexity and saving time.

What Should Crypto Accountants Do Today?

RP: Begin by reviewing your current cost basis methodology. Decide if continuing with your existing ledger or starting fresh is the best option for your business.

Once that’s clear, ensure all historical data is accurate. Then, use Cryptoworth’s tools to recalculate, lock transactions, and set up your system for compliance with the new rules by the January 2025 deadline.

👉 Access the full webinar replay, or read more about Rev. Proc. 2024-28 in this article.

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