GlossaryIntermediate
HIFO
Highest In, First Out — an accounting method assuming the highest-cost units are sold first.
Highest In, First Out (HIFO) is an accounting method that assumes the units with the highest original cost basis are the ones considered sold first, regardless of when they were actually acquired.
This is general education, not personalized tax advice — whether HIFO is an available or applicable method depends significantly on jurisdiction-specific rules.
Examples
- Under HIFO, units originally purchased at the highest price are treated as the ones sold first.
- Different accounting methods, including HIFO, can meaningfully change a transaction's calculated gain or loss.