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FIFO vs HIFO vs LIFO: A Practical Guide

A clear, data-driven guide to fifo vs hifo vs lifo.

Why lots matter

Each purchase creates a tax lot with its own cost basis and acquisition date. When you sell part of your holdings, the lot you choose determines your gain.

FIFO

First in, first out sells the oldest lots first. In a rising market this realizes larger gains but more often qualifies for long-term treatment in the US after one year.

HIFO and LIFO

Highest in, first out sells the highest-cost lots first and usually minimizes current gains. Last in, first out sells the newest. Specific identification requires records that tie sales to lots.

Rules and records

In the US, from 2025 brokers report on Form 1099-DA and wallet-by-wallet basis tracking applies. Other jurisdictions, such as the UK, use pooling rules instead of choosable lots.

Example

Lots bought at $20,000 and $60,000; you sell one BTC at $65,000. FIFO gain is $45,000, HIFO gain is $5,000. At a 24 percent rate the difference is $9,600 of tax this year.

By the numbers

For FIFO vs HIFO vs LIFO, the reference figures are topic of FIFO vs HIFO vs LIFO, level of Intermediate, updated of 2026. The comparison table below lines up method, gain on sale at $65k, tax at 24% — FIFO ($20k lot): $45,000 / $10,800; HIFO ($60k lot): $5,000 / $1,200.

Modeling FIFO vs HIFO vs LIFO with the FIFO Vs HIFO Crypto Tax Estimator

The FIFO Vs HIFO Crypto Tax Estimator takes three inputs — FIFO gain ($), HIFO gain ($), Tax rate (%). Savings = (FIFO gain − HIFO gain) × rate. With its default inputs (FIFO gain ($) = 20000; HIFO gain ($) = 8000; Tax rate (%) = 24) it returns 2,880 $; swap in the figures from FIFO vs HIFO vs LIFO above to reproduce the scenario yourself.

Modeling FIFO vs HIFO vs LIFO with the Tax Loss Harvesting Savings Simulator

The Tax Loss Harvesting Savings Simulator takes three inputs — Harvested loss ($), Tax rate (%), Offset cap ($). Savings = harvested loss × rate. With its default inputs (Harvested loss ($) = 10000; Tax rate (%) = 24; Offset cap ($) = 3000) it returns 2,400 $; swap in the figures from FIFO vs HIFO vs LIFO above to reproduce the scenario yourself.

Data Table

For educational and informational purposes only. Not financial, investment, tax or legal advice. Figures are approximate and historical; crypto assets are volatile and you may lose capital. Do your own research.