“Reduce Taxes by Using the Best
Cryptocurrency Accounting Method”
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with all the details…
Did you buy crypto and hang on during the ups and downs?
That’s terrific, but now you must find the best way to handle your tax bill. That’s where my new issue of Tax Reduction Letter comes in.
I’ll explain how, during this time of surging cryptocurrency prices, your method can greatly impact the amount of your taxable gains.
Meet the default method … FIFO
FIFO (first in, first out) is the default method of crypto accounting. You must use it if you don’t specify another method.
With this method, the tax code deems that you sell, exchange, or otherwise dispose of crypto in chronological order, beginning with the earliest unit you purchased or acquired—that is, on a first-in, first-out basis.
You should also know about HIPO.
With HIFO, the tax code deems that you sell the crypto units with the highest cost basis first.
Because HIFO first sells your crypto with the highest cost basis, it ordinarily results in the lowest gains. But using HIFO can also cause you to lose long-term capital gains treatment, since you may have held the highest-cost units for more than one year.
Then there’s LIFO
With LIFO, the tax code deems that you sell the last purchase first. LIFO stands for last-in, first-out.
And finally, there’s the “this is the one I sold method”
Want to know more about
how to enjoy your crypto winnings and
keep more money in your pocket? Not
Uncle Sam’s?
CLICK HERE to read my completely new article titled:
“Reduce Taxes by Using the Best
Cryptocurrency Accounting Method”