What is the difference between FIFO and LIFO?

FIFO (first-in-first-out) sells your oldest coins first; LIFO (last-in-first-out) sells your newest first. Because the lots were bought at different prices, the method changes your cost basis and therefore the taxable gain on the same sale.

Which method should I use for crypto taxes?

It depends on your jurisdiction — many require FIFO, some allow specific-identification or LIFO. In a rising market LIFO often defers tax by matching a higher recent cost basis, but you must use a method your tax authority permits and apply it consistently.

FIFO vs LIFO Cost Basis Calculator

Lot 1 quantity

Lot 1 buy price ($)

Lot 2 quantity

Lot 2 buy price ($)

Sell quantity

Sell price ($)

FIFO taxable gain

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The method changes the tax, not the trade

Same coins, same sale, different reported gain — that is the FIFO vs LIFO effect. Picking the allowed method that fits your situation can defer tax. Estimate the bill with the crypto tax calculator and offset with tax-loss harvesting.

Which coins did you "sell"? Tax math cares

Sell part of a stack bought at multiple prices and your taxable gain depends on which lots you're deemed to have sold. FIFO (first-in-first-out) sells your oldest coins; LIFO your newest; specific identification lets you choose. Same sale, materially different tax bills.

Example: bought 1 BTC at $30k (2023) and 1 at $90k (2025); sell 1 at $100k. FIFO realizes a $70k gain; LIFO realizes $10k. If your jurisdiction taxes long-held assets at lower rates, FIFO's bigger gain might still tax less than LIFO's smaller one — the interaction between method and holding-period rules is where the real money hides.

Two practical notes: your jurisdiction dictates which methods are allowed (some mandate FIFO, some allow specific-ID with record-keeping requirements), and the method's benefit compounds with record quality — exchanges delete old data, so exporting complete trade history yearly is what keeps the favorable method available to you at all. Run both numbers before selling, not at filing time.

Exporting that history by hand every year gets old fast — Koinly and CoinLedger track both FIFO and LIFO automatically and export whichever method your jurisdiction requires:

Koinly — tax report CoinLedger

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