FIFO vs LIFO vs HIFO for Crypto

"Just use HIFO to pay less tax" is advice that is half-true at best and not available at all in most of the world. This guide is what FIFO, LIFO and HIFO actually do to a gain, why the difference is a timing shift, and the jurisdiction reality that decides whether you can use them.

TL;DR

• FIFO = oldest lot sold; LIFO = newest; HIFO = highest-cost lot sold.
• Rising market: FIFO → largest gain, HIFO → smallest (this year).
• US: only FIFO or Specific Identification (Rev. Proc. 2024-28, per-wallet from 2025). HIFO/LIFO are not standalone methods — only via documented Spec-ID.
• UK / France: pooling / 150 VH bis — FIFO/LIFO/HIFO don't apply.
• The "lowest-tax method" is a timing shift, not free money — low-cost lots remain for later.
• Method availability is jurisdiction-specific; the question only makes sense per country (see cost-basis methods).

What each does

They do not change proceeds or prices — they change which acquisition cost is matched. The spread between them widens with volatility and a long holding history.

The US reality: not three methods, two

Under IRS Rev. Proc. 2024-28, the recognised methods are FIFO (default) or Specific Identification, with per-wallet tracking from 2025. HIFO and LIFO are not separate blessed elections — a HIFO/LIFO outcome is only achievable through a valid Specific Identification made at or before the sale, with adequate lot records (see tax-lot selection). "Electing HIFO" without satisfying Specific Identification is not a method; it is an unsupported position.

The UK/France reality: the question doesn't apply

In the UK, gains use share-pooling — same-day, then the 30-day rule, then the Section 104 average-cost pool. In France, the article 150 VH bis proportional portfolio formula applies (see the FR calculation). Neither picks an individual lot, so FIFO/LIFO/HIFO are simply not the operative concepts. Importing a HIFO spreadsheet into a UK or French return produces a number the framework does not recognise.

It's a timing shift, not a saving

Matching higher-cost lots now (a HIFO-style result) defers gain — but it leaves the low-cost lots in the holding, so a larger gain surfaces later. Over the full life of the position the total gain is the same; the method moves it in time. Treating HIFO as permanent tax reduction misstates what it does (relevant to tax-loss harvesting, which is also a timing tool).

Practical guidance

1. Establish your jurisdiction's framework first — lot-based vs pooling/portfolio.
2. US: FIFO or documented Specific ID only; no standalone HIFO/LIFO; per-wallet from 2025.
3. For a Spec-ID outcome, identify the lot at or before the sale and keep records.
4. UK/France: ignore FIFO/LIFO/HIFO — apply pooling / 150 VH bis.
5. Model the future-year effect — a smaller gain now means a larger gain later.
6. Keep consistent, documented lot records — the method is only as valid as the evidence.

How vendor tools handle FIFO/LIFO/HIFO

Koinly and CoinLedger can compute FIFO and Specific-ID (HIFO/LIFO-style) outcomes and pooling for the relevant jurisdictions. Confirm the tool only offers HIFO/LIFO where Specific Identification is actually permitted and recorded, applies per-wallet logic for the US from 2025, and switches to pooling/150 VH bis for the UK/France rather than forcing a lot method.

How Wag3s helps

Wag3s Folio computes the lot outcome only within what your jurisdiction permits — FIFO or documented Specific Identification (per-wallet) for the US, and pooling or the 150 VH bis portfolio formula where lot methods do not apply — with the records that support the position. See the Folio product page.

Further reading

• Crypto Cost Basis Methods 2026
• US Crypto Per-Wallet Cost Basis (2025)
• Crypto Tax-Lot Selection
• Realized vs Unrealized Gains in Crypto
• Crypto Tax-Loss Harvesting
• Crypto Capital Gains Calculation France (150 VH bis)

Sources

• IRS — Rev. Proc. 2024-28: FIFO (default) or Specific Identification; per-wallet tracking from 1 January 2025 (no standalone LIFO/HIFO methods)
• HMRC — Cryptoassets Manual: same-day, 30-day, Section 104 pool (no lot selection) — GOV.UK CRYPTO22200
• France — article 150 VH bis proportional portfolio formula (not lot-based)
• Cost-basis method selection is an inter-temporal allocation (timing shift), not a permanent reduction