COINOTAG News reported on January 1st that the Internal Revenue Service (IRS) of the United States has unveiled a temporary relief initiative designed to aid cryptocurrency holders utilizing centralized finance (CEFI) platforms. Scheduled for implementation on January 1, 2025, this regulation mandates the use of the first-in, first-out (FIFO) accounting method for digital assets unless taxpayers prefer alternative methods such as highest in, first out (HIFO) or Specific Identification (Spec ID). Furthermore, the IRS’s relief package permits taxpayers to utilize personal records or tax software to pinpoint specific crypto assets being transacted. However, it’s crucial to note that this relief is restricted solely to CEFI transactions occurring within 2025. Post-2025, taxpayers will be obliged to formally designate their chosen accounting methodology through their brokers.
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