The post Crypto Taxpayers Get Break as IRS Delays FIFO Implementation appeared on BitcoinEthereumNews.com.

According to CryptoQuant CEO Ki Young Ju, President-elect Donald Trump’s approach to Bitcoin and other cryptocurrencies will likely depend on the global perception of the United States economy and the strength of the US dollar. Meanwhile, Hive Digital announced that it will relocate to Texas due to Trump’s pro-Bitcoin policies, and Switzerland made major strides with a proposal to include Bitcoin in its national monetary reserves.  Crypto Investors Get Temporary Relief from IRS FIFO Rule The United States Internal Revenue Service (IRS) granted temporary relief to cryptocurrency holders on centralized exchanges from a rule that would have mandated the use of the FIFO (First In, First Out) accounting method for tax purposes. Under the initial IRS ruling, if investors did not explicitly select an accounting method, like HIFO (Highest In, First Out) or Specific Identification (Spec ID), brokers would default to reporting sales using FIFO. This method assumes that the oldest cryptocurrency bought is sold first, which could lead to higher capital gains taxes for many taxpayers. Tax experts like Shehan Chandrasekera, the head of tax at Cointracker, warned that the immediate enforcement of the rule could have caused serious financial strain for crypto investors during a bull market. Selling older assets first, often with the lowest cost basis, would unintentionally maximize taxable gains.  Mark Thomas, a crypto commentator, pointed out that FIFO could be beneficial only in specific scenarios, like when the sale date is more than one year after the earliest crypto purchase but within a year of the latest purchase, potentially qualifying for long-term capital gains tax instead of short-term. The temporary relief postpones the rule’s enforcement for sales on centralized crypto exchanges until Dec. 31 of 2025. This extension allows brokers more time to implement support for multiple accounting methods. During this period, taxpayers are responsible…

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Filed under: News - @ January 1, 2025 9:28 am