The descriptive text in the configuration dialog for choosing Multiple or Single Deposit method is not clear or understandable. The direction of trades is not made clear (see screenshot). What does ‘<->’ mean? Which side is a sell, which side is a buy? I could not find a document describing these options either. the blog post linked to in this configuration section only addresses choosing FIFO,LIFO,HIFO but does not discuss this deposit method setting. Could someone point me in the right direction.
It looks like you want to read it from top to bottom left to right. So first example buys Bitcoin @$4k, then buys Bitcoin @$5k, then sells $5k of BTC which is seen as $1k gain if you determine you’re selling the first BTC you obtained (the one from Binance).
When the sell happens on the second scenario, you’re selling the BTC you bought at the same exchange…Kraken…so you’re selling the BTC you bought for $7k not the BTC you bought for $4k.
ok so which deposit method is better if you’re a HODLER vs being a leveraged trader?
If you want simple consolidated option, Single Depot seems to make more sense. I personally like to keep things separate and spend more time organizing it, so I prefer Multiple Depot. I use several Exchanges and Wallets so it makes more sense to me and also like more complicated Tax reporting options.
Are you a HODLER or a trader or both? I’m new to this whole tax thing. Just trying to figure out which option is best.
I’m mostly HODLR but also trade on a regular basis.
Take your time learning about it. It’s a lot to take in. I would recommend Multiple Depot because it gives me more options but you can decide after doing some research. Any which way you go will be fine. Decision to pick between the two is very difficult because they are very similar. If it was black and white, it would be pretty easy. Really, take your time learning.
Which method do you use between FIFO, LIFO and HIFO since you’re mostly holding and also trading on a regular basis? Because I’m doing the same right now. I’m trading a little bit since it’s the bull market.
I did a separate post regarding this:
If possible HIFO or LIFO for short term but over one year, I feel it’s best to do FIFO so that you can take advantage of the long term capital gains. But once you sign up with accointing, you can run multiple cases to see which maybe best for you. It does take some time, learning; what I mean is that it’ll be a challenge to learn the process but in the long run, it will be more beneficial because I feel you will be involved in the crypto market for more than 10-20 yrs from now. Slow learning will get you there faster so take your time and accointing resources are available to you so remember to take advantage and reach out for help if you feel overwhelmed. Ultimately, saying goes, “Don’t Let The Tail Wag The Dog”. I don’t have any relationships with accointing, I just prefer to use it. I’ve used multiple platforms. Just wanted to add that.
I do understand why one would be recommended to choose the FIFO method if they’re planning to hold for at least one year to take advantage of the long term capital gains.
However, what if you were planning to sell it before the 1 year mark? Wouldn’t HIFO be better if you were a trader?
Yes, I agree with you. I think so too. But it’s just good to run the numbers.
but what I don’t get is which ones the better choice if you are holding 50% but trading 50%.
If you’re holding 50% long term, over 12 months then those won’t matter. For the other 50% of trading, I don’t know. It’s because Multiple and Single Depot transaction methods are simply different ways of representing cryptocurrency transactions.
You can get all your transactions in Multiple Depot then download your backup from Accointing then try the Single Depot to see which one works out best for your case by loading Accointing backup from both Multiple Depot and Single Depot. I personally haven’t tried it because I just prefer to use Multiple Depot. I also don’t know but I don’t think it’ll make much of difference so my recommendation would be to pick the one you feel is easier to work with.