What are cost basis methods?

The cost basis method you choose can impact your capital gains and your taxes.

Upon account signup, River automatically applies FIFO, or First In, First Out, as the cost basis method.

However, you can select from two additional cost basis methods:

• LIFO, or Last In, First Out

• HIFO, or Highest In, First Out

After setting a different method, this selection will apply to all your transactions moving forward.

What are unknown lots?

A bitcoin lot is considered unknown if it doesn’t have a cost basis. For any bitcoin deposited into your River account, the default acquisition date will be the deposit date, unless you manually enter the actual date the bitcoin was originally acquired.

Any bitcoin purchased on River will automatically have a cost basis and is considered a known lot.

How does my cost basis method affect my transactions?

The cost basis method selection works differently depending on whether you are selling or sending your bitcoin. Please see the tables below for additional information.

When selling bitcoin, the below cost basis methods apply:

When sending bitcoin or when internally transferring between River accounts, the below cost basis methods apply:

Effective February 28, 2023, you will no longer be able to enter $0 as a cost basis. If you have done so, the below cost basis methods will apply when selling bitcoin:

Effective February 28, 2023, you will no longer be able to enter $0 as a cost basis. If you have done so, the below cost basis methods will apply when sending bitcoin or when internally transferring between River accounts:

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 that the correct cost basis is added to your deposited bitcoin. River cannot attest to any manually entered tax lot information. River can only attest to bitcoin bought on River.