As you know, Bitwave automatically tracks the cost-basis of each blockchain transaction and
simplifies the way you track crypto taxes.
In Bitwave, you can select the tax strategy that works best for your business goals.
Bitwave supports FIFO, LIFO, Cost Averaging, and Specific Identifications.
First-in, First-out (FIFO) uses the coins you acquired first — ensuring your gains or losses are long-term but may imply high capital gains if you got into the crypto game early.
Last-in, First-out (LIFO) spends the most recent coins you’ve acquired — using coins close to the current market price to keep capital gains and losses small.
Cost Averaging, is when you choose to use the average cost of your coins as your cost-basis.
And lastly, Specific Identification allows you to run scenarios to select the best strategy. With this option, tax lots will be selected based on set coin selection strategies.
Whatever tax strategy you choose to use, Bitwave’s software supports it. But remember to speak to your CPA or tax attorney before selecting the tax strategy your business will use.
Disclaimer: The information provided in this blog post is for general informational purposes only and should not be construed as tax, accounting, or financial advice. The content is not intended to address the specific needs of any individual or organization, and readers are encouraged to consult with a qualified tax, accounting, or financial professional before making any decisions based on the information provided. The author and the publisher of this blog post disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use or application of any of the contents herein.