How does the FIFO tax rule apply to cryptocurrency investors?

1 answers

• Nov 26, 2021 · 3 years ago
  As an investor, it's important to understand how the FIFO tax rule applies to your cryptocurrency holdings. The FIFO method requires you to sell your oldest cryptocurrency first when you decide to sell. This means that the cost basis of the first cryptocurrency you acquired will be used to calculate your capital gains or losses. If you have acquired cryptocurrencies at different prices over time, the FIFO tax rule can have a significant impact on your tax liabilities. It's crucial to keep track of your transactions and consult with a tax professional to ensure compliance with the FIFO tax rule. Remember, tax laws can be complex, so it's always best to seek professional advice to avoid any potential issues with the IRS.
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