This rarely used tax loophole is helping some bitcoin holders lower their tax bill
Summary
Bitcoin is down around 36% from its all-time high in November, but the dip has a good side, thanks to a quirk in the tax code that helps crypto holders shield their winnings from the IRS. But a little-known accounting method known as HIFO — short for highest in, first out — can significantly slash an investors tax obligation. That means a crypto holder can pick out the most expensive bitcoin they bought and use that number to determine their tax obligation. The trick to HIFO accounting is keeping granular details about every crypto transaction you made for each coin you own, including when you purchased it and for how much, as well as when you sold it and the market value at that time. But if you dont have all transaction records logged, or youre not using the right kind of software, the accounting method defaults to something called FIFO, or first in, first out.