When Might a Trader Prefer the Specific Identification Method over FIFO?

A trader would prefer the Specific Identification method when they want to minimize their immediate tax liability or achieve a specific tax outcome. For instance, they can choose to sell the lot with the highest cost basis to minimize capital gains, or sell a lot held for over a year to realize a lower-taxed long-term capital gain, optimizing their tax strategy.

How Are Capital Gains Typically Classified for Crypto Spot Trading?
What Is the Primary Advantage of Specific Identification for Tax Planning?
Can a Trader Switch between FIFO and Specific Identification Methods?
What Is the Maximum Long-Term Capital Gains Tax Rate Currently?
Define Short-Term versus Long-Term Capital Gains in the Context of Derivatives
How Does a Change in Capital Gains Tax Affect a Derivative’s Profitability?
How Does the 60/40 Rule Affect a Trader in a High-Income Tax Bracket?
What Is the Tax Implication If a Crypto Option Is Classified as a “Collectible”?

Glossar