What is the best way to calculate LIFO and FIFO for cryptocurrency trades?

3 answers

• Dec 17, 2021 · 3 years ago
  The best way to calculate LIFO (Last-In, First-Out) and FIFO (First-In, First-Out) for cryptocurrency trades is to keep detailed records of your transactions. For LIFO, you would assume that the most recently acquired coins are the first ones sold. For FIFO, you would assume that the oldest coins are the first ones sold. By tracking the acquisition date and cost basis of each coin, you can accurately calculate your gains and losses using either method. It's important to note that the specific method you choose may have tax implications, so it's always a good idea to consult with a tax professional for guidance.
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• Dec 17, 2021 · 3 years ago
  Calculating LIFO and FIFO for cryptocurrency trades can be a bit tricky, but it's important for accurate tax reporting. One way to do it is by using a cryptocurrency tax software or tool that can automatically calculate your gains and losses based on the LIFO or FIFO method. These tools can help simplify the process and ensure accuracy. Additionally, some cryptocurrency exchanges may provide reports or statements that include the necessary information for LIFO or FIFO calculations. Be sure to check if your exchange offers this feature.
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• Dec 17, 2021 · 3 years ago
  At BYDFi, we recommend using the FIFO method for calculating gains and losses for cryptocurrency trades. FIFO is a straightforward method where you assume that the oldest coins are the first ones sold. This method is widely accepted and can help simplify your tax reporting. However, it's important to note that the choice of method may depend on your specific situation and tax regulations in your country. It's always a good idea to consult with a tax professional to ensure you're using the best method for your needs.
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