Crypto Cost Basis Methods 2026: The Jurisdiction Decides

The most common crypto-tax myth is that you pick the cost-basis method that minimises your bill. You do not. Your country fixes the method, and the wrong one produces a wrong return. This guide is the method matrix across the major jurisdictions and why it moves the number.

TL;DR

• The method is set by jurisdiction, not freely chosen.
• US (Rev. Proc. 2024-28): per-wallet tracking from 1 Jan 2025; FIFO or Specific ID (at/before sale, with records). No blessed LIFO/HIFO.
• UK: same-day → 30-day → Section 104 pool (average cost). Not FIFO.
• Germany: FIFO, with the >1-year holding = tax-free rule.
• Canada: Adjusted Cost Base (average), superficial-loss rule.
• France: article 150 VH bis proportional portfolio formula (see the FR calculation). Not FIFO.
• Same trades, different method → different taxable gain. Set tools to the right jurisdiction method.

Why the method moves the number

Cost basis decides which acquisition cost offsets a sale. In a rising market:

• FIFO matches the oldest, cheapest lot → larger gain.
• Higher-cost-lot matching → smaller gain.
• Average / pooling → a smoothed middle.

Identical proceeds, identical trades, different method, different tax. That sensitivity is exactly why tax authorities fix the method instead of leaving it to the taxpayer (see FIFO vs LIFO vs HIFO).

The jurisdiction matrix

The structural point: FIFO is not universal. Pooling (UK), average cost (Canada), and a proportional portfolio formula (France) are not FIFO, and applying FIFO there produces the wrong gain.

The recurring errors

• "I'll use HIFO to minimise tax" — only valid where Specific Identification is permitted and documented; it is not a globally available method.
• US universal cost basis after 2025 — no longer allowed; basis is per wallet/account (see the per-wallet rule).
• FIFO for a UK/French resident — wrong framework; pooling / 150 VH bis applies.
• One global tool default for a multi-country situation — the method must match each person's jurisdiction.

Practical guidance

1. Identify your jurisdiction's mandated method first — do not start from "what saves tax".
2. US from 2025: track per wallet/account; FIFO or documented Specific ID only.
3. UK: apply same-day, then 30-day, then the Section 104 pool — in that order.
4. Germany: FIFO with the one-year holding test; Canada: ACB with the superficial-loss rule.
5. France: the 150 VH bis portfolio formula at the foyer level — not FIFO.
6. Set your tool to the correct jurisdiction method and keep the supporting records.

How vendor tools handle cost-basis methods

Koinly and CoinTracker support multiple jurisdiction methods and (for the US) per-wallet tracking. Confirm the tool is set to your country's mandated method — per-wallet FIFO/Spec-ID for the US from 2025, Section 104 pooling for the UK, FIFO for Germany, ACB for Canada, 150 VH bis for France — not a single global default that silently produces a non-compliant gain.

How Wag3s helps

Wag3s Folio applies the cost-basis method your jurisdiction mandates — US per-wallet FIFO/Specific ID (Rev. Proc. 2024-28), UK Section 104 pooling, German FIFO, Canadian ACB, or the French 150 VH bis portfolio formula — and keeps the records each method requires. See the Folio product page.

Further reading

• How to Do Crypto Taxes
• FIFO vs LIFO vs HIFO for Crypto
• US Crypto Per-Wallet Cost Basis (2025)
• Realized vs Unrealized Gains in Crypto
• Crypto Capital Gains Calculation France (150 VH bis)
• Crypto Tax-Loss Harvesting

Sources

• IRS — Rev. Proc. 2024-28 (per-wallet/account basis from 1 January 2025; FIFO or Specific Identification)
• HMRC — Cryptoassets Manual: same-day rule, 30-day rule, Section 104 pool (TCGA 1992 s.104) — GOV.UK CRYPTO22200
• Germany — FIFO and the one-year holding period; Canada — adjusted cost base and the superficial-loss rule
• France — article 150 VH bis proportional portfolio method (per foyer fiscal)