Per Internal Revenue Service (IRS) rules, you must choose your cost basis method before the trade settles; once a transaction executes, it cannot be changed. You can select your account level cost-basis accounting method in your Coinbase tax settings or during the trade process. This determines how your gains/losses are calculated for tax purposes and gives you control over which assets are sold, traded, or spent first.
Methods offered by Coinbase
Method | Definition |
|---|---|
HIFO (Highest In, First Out) | First dispose of assets with the highest original purchase price |
LIFO (Last In, First Out) | First dispose of assets that you acquired most recently |
FIFO (First In, First Out) | First dispose of assets that you acquired first |
View or select your cost-basis method
There are two ways to modify your account level cost-basis methods:
Method 1: The newly elected cost basis methods can only be applied to open and future trades and will not be applied to your historical completed trades.
Go to the Tax settings page, where the Cost basis method button will display your current method.
To apply a new method to future transactions, select a new method.
Select Save.
Method 2: You can also choose your cost basis method in the trade process.
On the order preview screen, select the cost basis method.
Change your settings in the Cost basis method screen.
This setting is applied to all open and future trades unless otherwise changed.
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