Cost Basis Methods

Supported methods

Method	ID	IRS Compliant	Notes
First In, First Out	FIFO	✅ Default	Oldest lots sold first
Last In, First Out	LIFO	⚠️ Specific ID	Must elect Specific ID
Highest In, First Out	HIFO	⚠️ Specific ID	Must elect Specific ID
Specific ID	SPECIFIC_ID	✅	Manual lot selection
Germany FIFO	GERMANY_FIFO	🇩🇪	§23 EStG, 1-year holding
PMPA	PMPA	🇨🇦 🇦🇺	Adjusted Cost Base
Total Average	TOTAL_AVERAGE	🌍	Average cost basis
UK Share Pooling	UK_SHARE_POOLING	🇬🇧	Section 104 pool + 30-day rule

IRS note

The IRS allows FIFO and Specific Identification for crypto (Rev. Rul. 2023-14). LIFO and HIFO are technically Specific ID strategies — you must maintain lot-level records and consistently apply your method.

Usage

import { computeGains, compareAllMethods } from '@dtax/tax-engine';

// Single method
const result = computeGains(transactions, {
  method: 'FIFO',
  taxYear: 2024,
});

// Compare all 7 comparable methods (excludes SPECIFIC_ID)
const comparison = compareAllMethods(transactions, 2024);
comparison.forEach(({ method, totalGain, recommendation }) => {
  console.log(`${method}: $${totalGain} ${recommendation ? '← recommended' : ''}`);
});

Result shape

interface GainResult {
  shortTermGain: number;
  longTermGain: number;
  totalGain: number;
  disposals: Disposal[];
  unrealizedGain?: number;
}