FIFO (First In, First Out): what it means for crypto tax
FIFO is a cost basis method that assumes the earliest coins you bought are the first ones you sell. It is the most widely accepted default and often produces a larger gain in a rising market, since the oldest, cheapest lots are used first.
General information, not tax advice. Crypto tax rules differ by country and change over time, verify against your country's guidance or a qualified advisor.
An example
You bought 1 ETH at 1,000 then another at 2,000. Selling 1 ETH under FIFO uses the 1,000 lot, so your basis is 1,000.
Why it matters for your tax
The method decides which basis is matched to a sale, and so the size of the gain. FIFO is accepted almost everywhere, which is why it is the common default.
CryptaTax handles this automatically across your wallets and exchanges, so the concept is applied consistently without you tracking it by hand. Try the crypto tax calculator →
Related terms
See the full crypto tax glossary for every term, or the crypto tax guides for how they fit together.
FAQ
FIFO is a cost basis method that assumes the earliest coins you bought are the first ones you sell. It is the most widely accepted default and often produces a larger gain in a rising market, since the oldest, cheapest lots are used first.
See the crypto tax glossary for related terms, or the crypto tax guides for worked examples. Rules differ by country, so check your country's rules.