An accounting/report calculation method (a.k.a. cost basis method) helps you determine the order in which you dispose of your cryptocurrency. In situations where you bought your cryptocurrency at multiple price points, you’ll need to use a report calculation method to determine your capital gains and losses.
CoinLedger supports different methods depending on the country you're filing your taxes in. These methods can greatly impact your gains and losses in a given tax year.
Here are the different report calculation methods CoinLedger supports:
Here are the different report calculation methods CoinLedger supports:
General Accounting Methods:
HIFO, LIFO, FIFO
These report calculation methods are used in different countries around the world, including the United States and Australia.
Country-Specific Accounting Methods:
United Kingdom: Shared Pool
Canada: Adjusted Cost Base (ACB)
New Zealand: Adjusted Cost Base (ACB)
Unless you select a country with a country-specific report calculation method as your Country under Tax Settings, CoinLedger will run your reports using the FIFO (First-In, First-Out) method by default. If you select the United States as your country, CoinLedger will run your reports using the HIFO (Highest-In, First-Out) method by default.
How To Set Your Report Calculation Method
Step 1
Go to Tax Settings by clicking Edit in the Tax Report Settings panel on the Tax Reports page.
Step 2
From the Tax Settings page, scroll down to the Report Settings section and select your report calculation method. You can select one method for your entire account, or apply a method to a specific tax year.
For example, if you previously calculated your 2023 report using FIFO but in 2024 you’d like to calculate your report using HIFO, you can do this by setting a specific method for 2024 on the Tax Settings page.
To apply a calculation method to a specific tax year, click the All Tax Years menu and select the year you’d like to apply your custom settings to.
Using the above example, I would select the 2024 Tax Year. Then, I would select my desired method from the drop-down menu next to Report Calculation Method.
Now that you’ve chosen your desired accounting method, this setting will be applied to the tax year(s) that you specified.
For additional resources on accounting/cost basis methods, check out these guides.
For additional resources on accounting/cost basis methods, check out these guides.
Changing your accounting method can make a big impact on your tax report calculations. We strongly recommend reviewing your report calculation method options so that you are best informed to choose the costing method that optimizes your tax liability. For specific questions about changing your accounting method, we recommend consulting with a tax professional.