Article Summary
This article explains how your cost basis method (FIFO, LIFO, or HIFO) affects which tax lots are used when you send bitcoin from River.
When you send bitcoin from your River account, the bitcoin you send is deducted from your tax lots based on the cost basis method you have selected: FIFO, LIFO, or HIFO. Your selection only affects which tax lots are treated as sent first for tax reporting purposes. Your selection will not change the total amount of bitcoin you send.
When sending bitcoin, River uses the inverse of your cost basis method selection. Because bitcoin sends may not be taxable events, the intended effect is to leave more of the tax lots that you may later want to sell in your account.
When sending bitcoin or when internally transferring between River accounts, the cost basis logic will apply:
| Cost Basis Method Selection | Selection of Lots for Bitcoin Transfers |
| FIFO |
Newest, unknown lots are selected. Then, newest, known lots are selected. |
| LIFO |
Oldest, unknown lots are selected. Then, oldest, known lots are selected. |
| HIFO |
Newest, unknown lots are selected. Then, lowest-cost, known lots are selected. |
River reserves the right to exercise discretion regarding non-sale bitcoin transfers, but will adhere to the above ordering in most cases.
It is your responsibility to ensure the correct cost basis is added to any bitcoin you deposit into your River account. River cannot attest to any manually entered tax lot information. River can only attest to bitcoin bought on River.
For additional information on cost basis methods, please see these other Help Center articles:
- What are cost basis methods?
- How do I add cost basis information?
- How do I change my cost basis method?
River does not provide any financial, investment, legal, or tax advice. River is not responsible for any tax consequences related to or resulting from changing the cost basis method on your account. Consult a tax professional for guidance on your personal situation.