Is it possible to switch from using covered cost basis to uncovered cost basis for cryptocurrency investments?

3 answers

• dmbappybdMay 22, 2021 · 4 years ago
  Yes, it is possible to switch from using covered cost basis to uncovered cost basis for cryptocurrency investments. However, it is important to understand the implications and considerations before making the switch. Uncovered cost basis method involves calculating gains or losses based on the original cost of the cryptocurrency when it was acquired, without considering any previous transactions or adjustments. This method may result in higher tax liabilities as it does not account for any losses or adjustments made in the past. It is recommended to consult with a tax professional or accountant to understand the specific implications for your situation.
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• Self VintherAug 07, 2022 · 3 years ago
  Absolutely! You can switch from covered cost basis to uncovered cost basis for your cryptocurrency investments. Just keep in mind that the uncovered cost basis method may lead to higher tax liabilities, as it doesn't take into account any previous adjustments or losses. It's always a good idea to consult with a tax expert or accountant before making any changes to your cost basis method. They can provide you with personalized advice based on your specific circumstances and help you make an informed decision.
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• Benilson Abel PosterJun 21, 2023 · 2 years ago
  Switching from covered cost basis to uncovered cost basis for cryptocurrency investments is indeed possible. However, it's important to note that the uncovered cost basis method may result in higher tax liabilities. This is because it doesn't consider any previous adjustments or losses, which could have reduced your tax obligations. It's advisable to consult with a tax professional or accountant who specializes in cryptocurrency investments to understand the potential implications and make an informed decision based on your individual circumstances. Remember, tax laws and regulations can vary, so seeking professional advice is crucial.
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