Which cost basis method for crypto is considered the most accurate and reliable by tax professionals?

8 answers

• Dec 25, 2021 · 3 years ago
  As a tax professional, I believe that the FIFO (First-In, First-Out) method is the most accurate and reliable cost basis method for cryptocurrencies. This method assumes that the first cryptocurrency you acquired is the first one you sell or exchange. It is widely accepted by tax professionals and provides a straightforward approach to calculating gains or losses.
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• Dec 25, 2021 · 3 years ago
  From my experience, tax professionals often recommend using the specific identification method as the most accurate cost basis method for cryptocurrencies. This method allows you to identify the specific units of cryptocurrency you are selling or exchanging, which can be beneficial if you have a large number of transactions or want to optimize your tax liability.
  365122
• Dec 25, 2021 · 3 years ago
  According to a survey conducted by BYDFi, a popular cryptocurrency exchange, tax professionals are divided on the most accurate cost basis method for cryptocurrencies. While some prefer the FIFO method for its simplicity, others argue that the specific identification method provides a more accurate reflection of the actual cost basis. Ultimately, it is important to consult with a tax professional to determine the best method for your specific situation.
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• Dec 25, 2021 · 3 years ago
  When it comes to choosing the most accurate cost basis method for cryptocurrencies, tax professionals often consider the specific identification method as the gold standard. This method allows you to track the cost basis of each individual unit of cryptocurrency, providing the most accurate calculation of gains or losses. However, it requires meticulous record-keeping and may not be practical for all individuals.
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• Dec 25, 2021 · 3 years ago
  Tax professionals generally recommend using the average cost method as the most accurate and reliable cost basis method for cryptocurrencies. This method calculates the average cost of all units of a particular cryptocurrency you own and uses it as the cost basis for each sale or exchange. It provides a balanced approach and is suitable for individuals who make frequent transactions or have a diverse portfolio of cryptocurrencies.
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• Dec 25, 2021 · 3 years ago
  In my opinion, the most accurate and reliable cost basis method for cryptocurrencies is the specific identification method. This method allows you to choose which units of cryptocurrency you want to sell or exchange, giving you more control over your tax liability. However, it requires careful record-keeping and may not be suitable for everyone.
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• Dec 25, 2021 · 3 years ago
  When it comes to determining the most accurate cost basis method for cryptocurrencies, tax professionals often recommend using the average cost method. This method calculates the average cost of all units of a particular cryptocurrency you own and uses it as the cost basis for each sale or exchange. It provides a fair and balanced approach to calculating gains or losses.
  37347
• Dec 25, 2021 · 3 years ago
  As a tax professional, I believe that the specific identification method is the most accurate and reliable cost basis method for cryptocurrencies. This method allows you to track the cost basis of each individual unit of cryptocurrency, providing a precise calculation of gains or losses. However, it requires meticulous record-keeping and may not be suitable for individuals with a large number of transactions.
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