Bitcoin Forum
January 22, 2019, 07:40:20 AM *
News: Latest Bitcoin Core release: 0.17.1 [Torrent]
 
   Home   Help Search Login Register More  
Pages: [1]
  Print  
Author Topic: FIFO Accounting for Cryptocurrencies  (Read 59 times)
r01k
Jr. Member
*
Offline Offline

Activity: 81
Merit: 3


View Profile
February 03, 2018, 08:54:41 PM
 #1

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.
1548142820
Hero Member
*
Offline Offline

Posts: 1548142820

View Profile Personal Message (Offline)

Ignore
1548142820
Reply with quote  #2

1548142820
Report to moderator
There are several different types of Bitcoin clients. The most secure are full nodes like Bitcoin Core, which will follow the rules of the network no matter what miners do. Even if every miner decided to create 1000 bitcoins per block, full nodes would stick to the rules and reject those blocks.
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
codewench
Member
**
Offline Offline

Activity: 93
Merit: 29


View Profile
February 04, 2018, 02:11:09 AM
Merited by Foxpup (1), figmentofmyass (1)
 #2

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.

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.
r01k
Jr. Member
*
Offline Offline

Activity: 81
Merit: 3


View Profile
February 04, 2018, 04:00:13 AM
 #3

I see. Thanks!
Pages: [1]
  Print  
 
Jump to:  

Bitcointalk.org is not available or authorized for sale. Do not believe any fake listings.
Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!