What are the changes brought by the tax bill to the FIFO accounting method in the context of digital currencies?

3 answers

• Nov 30, 2021 · 3 years ago
  The tax bill introduced changes to the FIFO accounting method in the context of digital currencies. Under the new rules, taxpayers are required to calculate their gains or losses using the first-in, first-out method when disposing of digital currencies. This means that the digital currencies acquired first will be considered as sold first, and the cost basis of these coins will be used to calculate the taxable gain or loss. The changes aim to provide clarity and consistency in the taxation of digital currency transactions, ensuring that taxpayers accurately report their gains or losses.
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• Nov 30, 2021 · 3 years ago
  The FIFO accounting method, which stands for first-in, first-out, has been impacted by the tax bill in relation to digital currencies. Previously, taxpayers had more flexibility in choosing the method to calculate their gains or losses from digital currency transactions. However, with the new rules, the FIFO method becomes the default method for determining the cost basis of digital currencies. This change may have implications for individuals or businesses that engage in frequent trading or have specific tax strategies in place. It is important for taxpayers to understand these changes and consult with a tax professional to ensure compliance with the new regulations.
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• Nov 30, 2021 · 3 years ago
  BYDFi, a digital currency exchange, has implemented the changes brought by the tax bill to the FIFO accounting method. As a result, users of BYDFi will now have their digital currency transactions taxed based on the first-in, first-out method. This change aligns with the new regulations and ensures that users accurately report their gains or losses. BYDFi remains committed to providing a transparent and compliant trading environment for its users, and the implementation of the FIFO accounting method is part of this commitment.
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