Is there a specific approach to determining the cost basis of a cryptocurrency when there are multiple acquisitions?

3 answers

• May 02, 2022 · 3 years ago
  Determining the cost basis of a cryptocurrency when there are multiple acquisitions can be a complex task. One approach is to use the FIFO (First-In, First-Out) method, where you assume that the first cryptocurrency you acquired is the first one you sold. Another approach is the LIFO (Last-In, First-Out) method, where you assume that the last cryptocurrency you acquired is the first one you sold. Additionally, you can use the specific identification method, where you track the cost basis of each individual acquisition. It's important to consult with a tax professional or accountant to determine the most appropriate method for your specific situation.
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• May 02, 2022 · 3 years ago
  When you have multiple acquisitions of a cryptocurrency, determining the cost basis can be a bit tricky. One approach is to use the average cost method, where you calculate the average cost of all your acquisitions and use that as the cost basis. Another approach is to use the specific identification method, where you track the cost basis of each individual acquisition. This method requires more record-keeping but can provide a more accurate cost basis. It's important to keep detailed records of your acquisitions and consult with a tax professional to ensure compliance with tax regulations.
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• May 02, 2022 · 3 years ago
  Determining the cost basis of a cryptocurrency when there are multiple acquisitions can be challenging. One approach is to use a third-party platform like BYDFi, which provides tools and features to help track and calculate the cost basis of your cryptocurrency holdings. BYDFi allows you to import your transaction history and automatically calculates the cost basis based on various methods, such as FIFO or specific identification. It's important to note that the specific approach may vary depending on the platform or exchange you use. It's always recommended to consult with a tax professional to ensure accurate reporting and compliance with tax regulations.
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