What is the HIFO method for calculating cryptocurrency gains?

3 answers

• Nov 26, 2021 · 3 years ago
  The HIFO (Highest In, First Out) method is a way to calculate gains from cryptocurrency investments. It involves selling the coins or tokens that were acquired at the highest cost first, and then calculating the gains based on the difference between the selling price and the highest cost. This method is important because it can help minimize tax liabilities by maximizing the cost basis of the coins sold. By selling the coins with the highest cost first, the gains are calculated based on the smallest price difference, resulting in potentially lower taxable gains.
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• Nov 26, 2021 · 3 years ago
  The HIFO method is a popular choice among cryptocurrency investors because it allows them to minimize their tax obligations. By selling the coins or tokens with the highest cost basis first, investors can reduce their taxable gains. This method is especially useful in a market where prices are volatile and investors may have acquired coins at different prices over time. By using the HIFO method, investors can optimize their tax strategy and potentially save money on taxes.
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• Nov 26, 2021 · 3 years ago
  At BYDFi, we recommend using the HIFO method for calculating gains from cryptocurrency investments. This method is widely accepted and can help investors minimize their tax liabilities. By selling the coins with the highest cost basis first, investors can reduce their taxable gains and potentially save money on taxes. It's important to consult with a tax professional or accountant to ensure compliance with tax regulations and to fully understand the implications of using the HIFO method for calculating gains.
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