Here are the links for very easy-to-use handy Excel sheet for calculating the gains (after commissions) in bitcoin (or other cryptocurrency) trading using FIFO and LIFO methods.
Bitcoin Cryptocurrency FIFO Gain Calculator for Taxation https://www.eloquens.com/tool/3MdIAv/engineering/cryptocurrency-excel-templates/bitcoin-cryptocurrency-fifo-gain-calculator-for-taxation
Bitcoin Cryptocurrency LIFO (Last In First Out) Gain Calculator for Taxation https://www.eloquens.com/tool/3B4lfy9X/engineering/cryptocurrency-excel-templates/bitcoin-cryptocurrency-lifo-last-in-first-out-gain-calculator-for-taxation
The implications for your taxes due would be significant, depending upon the choice (either FIFO or LIFO methods) you make. So I would suggest to try LIFO and FIFO calculators to decide which method is better for you.
Topic: FIFO Accounting for Cryptocurrencies (Read 189 times)
I see. Thanks!
Let's say that in 2012 I bought 1 XCoin at $1. In 2017 I get 10 more at $11 this time. But January FUD makes me sell 10 at $12.
If I have understood right, when FIFO accounting is applied the percentual gain for the 10 coins sold is considered equal to the very first I bought: 10 coins x $10 gain each = $100.
If I have understood right, when FIFO accounting is applied the percentual gain for the 10 coins sold is considered equal to the very first I bought: 10 coins x $10 gain each = $100.
No. You've sold one coin with a gain of $11, and nine coins with a gain of $1. You are left with one coin with a cost basis of $11. Your gain is $20 - split into $11 long term and $9 (likely) short term gain.
In absence of clearer guidance from the IRS the safest method to account for cryptocurrency gains or losses is FIFO. Let's say that in 2012 I bought 1 XCoin at $1. In 2017 I get 10 more at $11 this time. But January FUD makes me sell 10 at $12.
If I have understood right, when FIFO accounting is applied the percentual gain for the 10 coins sold is considered equal to the very first I bought: 10 coins x $10 gain each = $100. That means that I'll pay taxes on a technical gain significantly higher than what I actually made.
If I have understood right, when FIFO accounting is applied the percentual gain for the 10 coins sold is considered equal to the very first I bought: 10 coins x $10 gain each = $100. That means that I'll pay taxes on a technical gain significantly higher than what I actually made.
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