How does first in last out accounting affect the tax implications of cryptocurrency transactions?

1 answers

• cupsMay 28, 2023 · 2 years ago
  The first in last out accounting method, also known as FIFO, plays a significant role in the tax implications of cryptocurrency transactions. When you use FIFO, you sell or exchange the coins you acquired first before the ones you acquired later. This can have an impact on your capital gains taxes. If the value of the coins you bought first has increased, you may have to pay taxes on the gains when you sell or exchange them. On the other hand, if the value has decreased, you may be able to offset your gains with losses. It's essential to keep accurate records of your transactions and consult with a tax professional to ensure compliance with tax regulations.
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