What are the best practices for implementing FIFO or LIFO for crypto tax purposes?

3 answers

• Dec 20, 2021 · 3 years ago
  One of the best practices for implementing FIFO or LIFO for crypto tax purposes is to keep detailed records of all your cryptocurrency transactions. This includes the date, time, and value of each transaction. By maintaining accurate records, you can easily calculate your gains and losses using either the FIFO or LIFO method. Additionally, it is recommended to use cryptocurrency tax software or consult with a tax professional to ensure accurate calculations and compliance with tax laws.
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• Dec 20, 2021 · 3 years ago
  When it comes to implementing FIFO or LIFO for crypto tax purposes, it's important to understand the difference between the two methods. FIFO stands for First-In-First-Out, which means that the first cryptocurrency you acquired will be the first one you sell or exchange. On the other hand, LIFO stands for Last-In-First-Out, which means that the most recently acquired cryptocurrency will be the first one you sell or exchange. The best practice is to choose the method that aligns with your investment strategy and consult with a tax professional to ensure compliance with tax regulations.
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• Dec 20, 2021 · 3 years ago
  At BYDFi, we recommend implementing FIFO for crypto tax purposes. FIFO is a widely accepted method that is easy to understand and calculate. It ensures that the oldest cryptocurrency you acquired is considered first when calculating gains and losses. However, it's important to note that tax regulations may vary by jurisdiction, and it's always best to consult with a tax professional to determine the most appropriate method for your specific situation.
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