GlossaryIntermediate
FIFO
First in, first out — one general method for deciding which units of an asset were sold.
FIFO, or "first in, first out," is a general accounting method that assumes the earliest-acquired units of an asset are the ones sold first when calculating gains or losses.
This is one general educational example of an accounting method; other methods exist, and which methods are permitted or required varies by jurisdiction. This is not personalized tax advice.
Examples
- Under FIFO, if someone bought crypto at three different times and later sold some, the earliest purchase is treated as sold first.
- Different accounting methods can produce different calculated gains for the exact same set of transactions.