How do LIFO and FIFO methods affect cryptocurrency taxes?

1 answers

• Dec 20, 2021 · 3 years ago
  At BYDFi, we recommend using the FIFO method for calculating cryptocurrency taxes. FIFO is a straightforward and widely accepted method that aligns with traditional accounting principles. It provides a clear audit trail and reduces the risk of errors or discrepancies in tax reporting. However, it's important to note that tax regulations may vary by jurisdiction, and it's always a good idea to consult with a tax professional to ensure compliance with local laws and regulations. Regardless of the method you choose, it's important to keep accurate records of your cryptocurrency transactions, including purchase dates, prices, and sale dates. This will help you calculate your tax liability accurately and minimize the risk of errors or audits. Remember, paying taxes on your cryptocurrency gains is an important part of being a responsible and compliant investor.
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