With Coinbase Taxes, we calculate your gains or losses using the highest-in, first-out (HIFO) method. Meaning, when determining your gains or losses, we sell the highest purchase price first. 

If you’ve paid taxes on your cryptocurrency in previous tax years, you may want to check that you’re not paying taxes on the same activity again. If you used the last-in, first-out (LIFO) method, first-in, first-out (FIFO) method, or any method other than HIFO for your 2020 taxes, consider comparing our records to yours to make sure they match. 

To compare records:

  1. Download your gain/loss report (CSV or PDF).

  2. Find the lots we determined you sold, spent, or converted in 2021. 

    • Each separate purchase of an asset is called a “lot.”

  3. In your records for previous tax years, find the lots that you reported as sold, spent, or converted to the IRS and paid taxes on.

  4. Compare the lots we determined you sold, spent, or converted in 2021 against the lots you reported in previous years. 

    • Your records match ours if we don’t repeat any lots.

If your records match ours, use the report you just downloaded to prepare your own taxes, send them to a Certified Public Accountant (CPA), or leverage a filing software.

If your records don’t match ours, it may be best to calculate your gains/losses for 2021 and ensure you’re not paying taxes on anything you’ve already reported to the IRS. Here are a few suggestions to assist you:

  • Use CoinTracker to manage your gain/loss calculation with the cost basis method you previously used

  • Work with a CPA

  • Manually perform your calculations using a blank slate with Raw Transaction Report