- IRS delays FIFO rule, giving crypto investors time to use flexible accounting methods like HIFO and Spec ID.
- Legal challenges question IRS’s expanded reporting rules for digital assets, citing overreach and privacy concerns.
The Internal Revenue Service (IRS) has delayed the enforcement of a rule requiring centralized crypto exchanges to use the First In, First Out (FIFO) method for capital gains calculations.
Meanwhile, this relief extends until the 31st of December 2025, providing taxpayers and brokers additional time to adjust to the requirements.
FIFO calculates gains by assuming the oldest assets are sold first, which can result in higher taxable gains during rising markets.
This approach raised concerns among investors about inflated tax bills, prompting calls for flexibility.
During the relief period, taxpayers can instead choose methods like Highest In, First Out (HIFO) or Specific Identification (Spec ID) to reduce their tax exposure.
Concerns surrounding FIFO and alternative options
FIFO often leads to larger taxable gains...
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