United States
Individual tax lots by FIFO, LIFO or HIFO, kept account by account from 2025, with Form 8949 sorted into the boxes the IRS added for digital assets.
- Tax authority
- Internal Revenue Service (IRS)
- Method
- Lot tracking (FIFO, LIFO or HIFO)
- Currency
- USD
- Tax year
- 1 January – 31 December
- Holding period
- Two classes: short-term (held one year or less) at ordinary income rates; long-term (held more than one year) at the lower capital-gains rates.
The rules the program applies
- Account-by-account basis (T.D. 10000)
- From 1 January 2025, cost basis is kept per wallet and per account (Treasury Decision 10000, Reg. §1.1012-1(j)); a sale on one exchange uses only lots held there. The program tracks lots by account, moves them with your transfers (oldest first, as §1.1012-1(j)(1) requires), splits a lot when only part of it moves, and keeps each lot's original account for the audit trail. If you made a safe-harbor allocation under Rev. Proc. 2024-28, the program records the one you made; it never chooses one for you.
- Form 8949 boxes for digital assets
- For 2024 and earlier, crypto goes in Box C (short-term) or F (long-term). From 2025 the form has digital-asset boxes: G or J when the exchange's Form 1099-DA reported your basis, H or K when it issued a 1099-DA without basis, and I or L when you received no 1099-DA. You record each exchange's 1099-DA status in Settings and the program sorts every sale.
- Wash-sale rule — a switch, off by default
- Section 1091 is written for stock and securities; the IRS has not extended it to crypto, and the bills that would have not passed. So the rule is a switch on the calculation, off unless you turn it on, and every run is labelled with its setting. When it is on, a loss on a sale with a repurchase within 30 days before or after is disallowed and added to the basis of the replacement lot.
- Short-term and long-term
- A lot held for one year or less is short-term, taxed as ordinary income; a lot held for more than one year is long-term, at the lower capital-gains rates. The program classifies each disposal from the lot's acquisition date, counting the day after acquisition as day one.
The reports
The names are the program's own, as they appear on its Reports page. Each is a PDF, and the tables are also CSV.
- Form 8949
- Schedule D
- Lot Tracking
- Wash Sale Report
- Income Report
- Audit Provenance
See every one on the United States example set →
Lot tracking#
Unlike Canada’s pooled ACB, the US tracks individual tax lots. Each acquisition is its own lot with its own cost, acquisition date and holding period.
FIFO (first in, first out): the oldest lots are sold first. The IRS default.
LIFO (last in, first out): the newest lots are sold first.
HIFO (highest in, first out): the highest-cost lots are sold first, which minimises the realised gain.
Example (FIFO):
| Date | Action | Quantity | Price | Lot |
|---|---|---|---|---|
| 15 Jan | Buy 1.0 BTC | 1.0 | $50,000 | Lot 1 |
| 10 Mar | Buy 0.5 BTC | 0.5 | $60,000 | Lot 2 |
| 20 Jun | Sell 0.8 BTC | -0.8 | $65,000 | Lot 1 (FIFO) |
Gain: (0.8 × $65,000) − (0.8 × $50,000) = $12,000 — short-term here, since Lot 1 was held for five months.
Account-by-account basis (T.D. 10000)#
From 1 January 2025, Treasury Decision 10000 requires cost basis to be kept per wallet and per account; pooling every lot you own into one universal pile is no longer allowed. When you sell on one exchange, only lots held on that exchange can supply the cost.
What the program does:
- Tracks lots by account, taken from your imports
- Moves lots with your transfers, oldest first, as §1.1012-1(j)(1) requires
- Splits a lot when a transfer moves only part of it
- Keeps each lot’s original account, so the trail is auditable
- Records a Rev. Proc. 2024-28 safe-harbor allocation you have already made. The election is one-time and irrevocable, so the program never proposes or makes one for you.
Why this matters: your Form 1099-DA may show no cost basis for assets you transferred between wallets or bought before 2025. The program calculates the basis you actually have and produces the records to support it.
The wash-sale switch#
Section 1091 disallows a loss when you buy substantially identical property within 30 days before or after a sale, and adds the disallowed loss to the basis of the replacement lot. It is written for stock and securities. The IRS has not extended it to crypto, and the bills that would have not passed.
So in the program the rule is a switch on the calculation, off by default. Run the year with it off and again with it on, and the Wash Sale report shows every disallowed loss with its matching repurchase, so you can see what the rule would change. Each run is labelled with the setting it used; the US example set has one of each.
Form 1099-DA and Form 8949#
From 2025, exchanges file Form 1099-DA reporting your gross proceeds to the IRS; from 2026 they also report cost basis. Form 8949 gained boxes for digital assets to match. The program sorts each sale by the year and by the 1099-DA status you record for that exchange in Settings:
| Tax year | Exchange reported basis on a 1099-DA | Exchange issued a 1099-DA without basis | No 1099-DA |
|---|---|---|---|
| 2024 and earlier | — | — | Box C (short) / F (long) |
| 2025 and later | Box G (short) / J (long) | Box H (short) / K (long) | Box I (short) / L (long) |
References#
- T.D. 10000 (89 FR 56480, 9 July 2024) — per-account cost basis for digital assets, Reg. §1.1012-1(j)
- Rev. Proc. 2024-28 — the one-time safe harbor for moving from universal to per-account basis
- Notice 2025-7 — temporary relief for identifying the units sold during 2025
- IRC §1091 — the wash-sale rule for stock and securities
- IRC §1222 — the short-term and long-term definitions
- Form 8949 and Schedule D instructions — Sales and Other Dispositions of Capital Assets; Capital Gains and Losses
Read more
- US Tax Calculation — Calculate cost basis using FIFO, LIFO, or HIFO under IRS rules.
- US Tax Formulas — Technical formulas for FIFO, LIFO, and HIFO lot selection methods.
- Wash Sale Rules — Understanding IRS wash sale rules (Section 1091) for digital assets.
- 1099-DA & Account-by-Account Basis — Per-account cost basis tracking under T.D. 10000 and 1099-DA box categorization.
Or read what it costs.