How does LIFO (Last-In, First-Out) method affect cryptocurrency investing on Robinhood?

3 answers

• Apr 18, 2022 · 3 years ago
  The LIFO (Last-In, First-Out) method is a way of valuing inventory or assets where the most recently acquired items are assumed to be sold first. In the context of cryptocurrency investing on Robinhood, this means that when you sell your cryptocurrencies, the ones you bought most recently will be considered as sold first. This can have tax implications as it may result in higher capital gains taxes if the most recently acquired cryptocurrencies have appreciated in value. It's important to keep track of your buying and selling order to understand the impact of LIFO on your tax obligations.
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• Apr 18, 2022 · 3 years ago
  When using the LIFO method on Robinhood, it's crucial to be aware of the potential tax consequences. Selling the most recently acquired cryptocurrencies first means that you may be realizing higher capital gains, which can result in a larger tax liability. However, it's important to consult with a tax professional or accountant to fully understand the implications and determine the best strategy for your specific situation. They can help you navigate the complexities of cryptocurrency taxation and ensure compliance with relevant laws and regulations.
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• Apr 18, 2022 · 3 years ago
  BYDFi, a digital currency exchange, also follows the LIFO (Last-In, First-Out) method for cryptocurrency investing. This method affects the calculation of gains and losses for tax purposes. When you sell your cryptocurrencies on BYDFi, the ones you acquired most recently will be considered as sold first. This can impact your tax obligations, as selling recently acquired cryptocurrencies may result in higher capital gains. It's important to consult with a tax professional or accountant to understand the specific implications and requirements of using the LIFO method on BYDFi.
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