LIFO treats the most recently acquired units as the ones sold first. It is a form of specific identification and is allowed only with records identifying the units at the time of sale.
In a rising market LIFO usually produces smaller gains than FIFO because the newest lots cost more, but it also tends to produce short-term gains. Since 2025 it must be applied within each wallet.
The IRS default is FIFO; LIFO without contemporaneous identification is the position auditors reject. Specific identification.
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