What is the cost basis for calculating capital gains in the first in first out method in the context of cryptocurrency?

3 answers

• Dec 17, 2021 · 3 years ago
  The cost basis refers to the original value of an asset for tax purposes. In the FIFO method, it means that the cost basis of the first cryptocurrency you acquired is used to calculate capital gains when you sell or dispose of a portion of your holdings. For example, if you bought Bitcoin at $10,000 and later sold some at $15,000, the cost basis for calculating capital gains would be $10,000. This method assumes that the first cryptocurrency you acquired is the first one you sell.
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• Dec 17, 2021 · 3 years ago
  When it comes to calculating capital gains in cryptocurrency using the FIFO method, the cost basis is the original purchase price of the first cryptocurrency you acquired. This means that when you sell or dispose of a portion of your holdings, the capital gains are calculated based on the difference between the selling price and the cost basis. It's important to keep track of the order in which you acquired your cryptocurrencies, as it determines the cost basis for each transaction.
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• Dec 17, 2021 · 3 years ago
  In the context of cryptocurrency, the cost basis for calculating capital gains in the FIFO method is determined by the price at which you acquired the first cryptocurrency in your portfolio. This means that when you sell or dispose of a portion of your holdings, the capital gains are calculated based on the difference between the selling price and the cost basis. It's a straightforward method that assumes the first cryptocurrency you acquired is the first one you sell. Keep in mind that this method may have tax implications, so it's always a good idea to consult with a tax professional for accurate advice.
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