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djmeistro✝️ 🍊💊⚡️ 1y ago

Hypothetical #asknostr question for accountants:

Let's say I want to sell some of my Bitcoin... My earliest purchases are going to be hard to calculate my cost basis because I didn't keep good records/the platform my now be defunct...

Let's say I want to use LIFO (since I do have better records of my cost basis). I currently DCA hourly so there's this past year lot of bitcoin that is short term holdings.

The question is can I choose to use LIFO on only bitcoin considered long term holdings?

#plebchain #growstr #accountingstr

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Lighthouse 1y ago

Yeah this shit is too complex

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Master Mined 1y ago

Yes, if you can specify which bitcoin you're selling.

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djmeistro✝️ 🍊💊⚡️ 1y ago

So let's say in a year from now I want to sell more bitcoin, the short term lots that have become the newest long term lots would be sold first, correct?

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Master Mined 1y ago

Yes. As long as you track it and can prove it to the IRS, you're good 👍

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Corey San Diego 1y ago

Better yet, sell bitcoin specifically bought from an exchange and dont claim on your taxes. Fuck the IRS.

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djmeistro✝️ 🍊💊⚡️ 1y ago

I feel you 💯% when you say f the IRS, but the reality is I wouldn't want to get audited and fined...

I have thought of options though like relocating to El Salvador

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Corey San Diego 1y ago

And renounce citizenship? Either way the man gets his cut.

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djmeistro✝️ 🍊💊⚡️ 1y ago

Would not renouce citizenship... I wouldn't have to covert back to USD though and took enough privacy precautions with my stack... Doubt the IRS would send someone to reconcile

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djmeistro✝️ 🍊💊⚡️ 1y ago

EL Salvador is the nuclear option; hence the reason for my question in the first place

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Corey San Diego 1y ago

Legally if you are a citizen and spend bitcoin anywhere, its a taxable event.

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djmeistro✝️ 🍊💊⚡️ 1y ago

I understand that completely... My point is I'd feel safer saying screw the IRS if I didn't have to convert back to USD and use those payment rails versus spending it in a district where bitcoin is already legal (and already done my homework of making my stack more private)

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𝕞𝕪𝕡𝕒𝕥𝕙𝕥𝕠𝕗𝕚𝕣𝕖 1y ago

For the earlier bitcoin, I would just try to estimate the approximate amount per month or year if possible and then take the average price per month/year and use that as cost basis. If you are asked for backup evidence you can give this explanation. NFA of course, see a tax advisor