How does the choice between FIFO and LIFO impact my crypto tax liability?

3 answers

• Mladen VucicMay 05, 2023 · 2 years ago
  Choosing between FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) can have a significant impact on your crypto tax liability. FIFO means that the first coins you acquired will be the first ones you sell or trade, while LIFO means that the most recently acquired coins will be the first ones you sell or trade. This choice affects the cost basis of your coins, which in turn affects the amount of capital gains or losses you report on your tax return. It's important to consult with a tax professional to determine which method is most advantageous for your specific situation.
  584

  292
• HervaDec 23, 2022 · 3 years ago
  When it comes to crypto taxes, the choice between FIFO and LIFO can make a big difference. FIFO is like waiting in line at the supermarket - the first coins you bought are the first ones you sell. LIFO, on the other hand, is like cutting in line - the most recent coins you bought are the first ones you sell. Depending on the price movements of the coins, this choice can impact your tax liability. It's always a good idea to consult with a tax expert to make sure you're choosing the method that works best for you.
  517

  173
• Sanni GuptaApr 21, 2023 · 2 years ago
  According to BYDFi, a leading cryptocurrency exchange, the choice between FIFO and LIFO can have a significant impact on your tax liability. FIFO is the default method used by most exchanges, but LIFO can be a better option in certain situations. For example, if you bought coins at a low price and the price has since increased, using LIFO can help you minimize your capital gains. However, if you bought coins at a high price and the price has since decreased, using FIFO may be more advantageous. It's important to consider your specific circumstances and consult with a tax professional before making a decision.
  616

  154