Is there a specific formula or calculation I should use to find the cost basis of my digital currencies?

1 answers

• Jan 12, 2022 · 3 years ago
  When it comes to calculating the cost basis of your digital currencies, there isn't a one-size-fits-all formula. The method you use may depend on various factors, such as the tax regulations in your country and your personal preferences. Some common methods include FIFO (First In, First Out), LIFO (Last In, First Out), and specific identification. FIFO assumes that the first digital currencies you acquired are the first ones you sell or exchange, while LIFO assumes the opposite. Specific identification involves tracking the cost of each individual digital currency you acquire and using that specific cost when you sell or exchange it. It's important to consult with a tax professional or financial advisor to determine the best method for your specific situation and to ensure compliance with applicable regulations.
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