Does anybody know if there are rules about switching between LIFO and FIFO?
my duckduckfu is failing me
my duckduckfu is failing me
I would be very surprised if you could switch in relation to the same asset. You might be able to apply different rules to different assets.
Edit: this suggests using FIFO on a wallet by wallet basis.
https://bravenewcoin.com/insights/capital-gains-on-cryptocurrency-fifo-lifo-or-specific-identification
You just don't change mid-stream. I suppose if you get a new wallet and fill it with new coins you could switch for that wallet, but if you ever move coins from your LIFO wallet into the FIFO one you would have to record the LIFO profit/loss first then use today's price as the basis point for the new FIFO coins.
Either way you're fucked in the long run.
Worth noting that Ive read in multiple places that while the IRS mostly doesnt care which method you use, but they frown upon switching between methods each year and will sometimes force you do redo returns using the method you used in prior years, so best to pick one and stick with it across the board each year if you dont want to have to worry about spending time and or money amending your returns.
Also of note there is at least one other method called HIFO that you can choose from, and perhaps even more that I don't know about.