How does the FIFO accounting formula impact the taxation of cryptocurrency transactions?

1 answers

• Dec 27, 2021 · 3 years ago
  The FIFO accounting formula is an important factor in determining the taxation of cryptocurrency transactions. It ensures that the cost basis of the first coins or tokens you acquire is used to calculate your capital gains or losses. This means that if you acquired your cryptocurrency at different prices over time, the cost basis of the earliest acquired coins will be used first when calculating your tax liability. It's crucial to keep track of the order in which you acquired your cryptocurrency assets and apply the FIFO method correctly to accurately report your taxes. If you're unsure about how to apply the FIFO accounting formula to your cryptocurrency transactions, it's recommended to consult with a tax professional or use tax software that can handle cryptocurrency taxation calculations.
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