Crypto Cost Basis Method Selection Guide for Tax Optimization (2026)
Choose optimal crypto cost basis method: FIFO, LIFO, specific identification, HIFO comparison and tax impact analysis for basis selection.
Summary
Cost basis method impacts crypto tax liability. This guide explains FIFO, LIFO, specific ID, and HIFO selection for optimal tax outcome.
Key Steps
- 1Understand FIFO: first-in, first-out default method, oldest coins sold first.
- 2Evaluate LIFO: last-in, first-out sells most recent coins, may reduce gains.
- 3Consider specific ID: identify exact coins sold, requires detailed records.
- 4Compare HIFO: highest-in, first-out sells highest-cost coins first.
- 5Document method choice: IRS requires consistent method, document selection.