pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
...I have decided to sell and rebuy a portion of the crypto to generate $300k approx cap gains. That may also give some flexibility to the accountant choosing between first in first out or last in first out. ...
Won't you need to chose between FIFO or LIFO or SID before selling so the 1099-B issued to you by the brokerage reflects your chosen cost basis election? While what I found relates to stocks I would think it would equally relate to crypto.
Unfortunately, you cannot defer your decision on cost basis election for a stock sale until you file your tax return. Choosing a cost basis method is generally required before the trade settles, and waiting until tax time might lead to several disadvantages:
Therefore, it's crucial to make your cost basis election before the trade settles. Your brokerage firm should provide you with information on available options and resources to help you understand the implications of each method. You can also consult a tax professional for personalized advice.
- Missed benefits: You might miss out on potential tax advantages by choosing a different cost basis method. Comparing the impact of different methods (e.g., FIFO, LIFO, specific identification) on your overall tax liability before settling the trade allows you to make an informed decision.
- Inaccurate reporting: Your brokerage firm is now required to report cost basis information to the IRS for transactions after certain dates. Delaying your decision might result in them reporting an incorrect basis if you haven't provided them with your choice on time.
- Penalties: In some cases, waiting until tax time to report a cost basis could lead to penalties from the IRS, especially if it results in inaccuracies on your return.