Intelligence

Tax Report

7 min read

What it is

Tax Report turns your real fills into 8949-ready line items for filing. Pick a method (FIFO / LIFO / HIFO), pick a tax year, and the cost-basis engine matches every sell to its corresponding buy lot and computes per-lot short-term + long-term realized P&L. Export to CSV for your CPA or tax software. The Method Comparison card shows all three methods side-by-side so you can pick the lowest-tax outcome.

How to think about it

Same trades, different number depending on which method you pick. The IRS allows FIFO by default and HIFO via specific identification — most US filers can legally choose either. This page surfaces both numbers honestly so you (and your CPA) can decide.

Step-by-step

  1. Pick a cost-basis method (FIFO / LIFO / HIFO)

    FIFO (First In First Out) = IRS default, oldest lot sold first. LIFO (Last In First Out) = newest lot sold first; useful when newer lots have similar basis to current price. HIFO (Highest In First Out) = highest-basis lot sold first; typically minimizes gains and is allowed by the IRS as "specific identification."

  2. Pick a tax year

    Current year + previous 4 years available, plus "All years" for a lifetime view. The IRS requires you to file each tax year separately, so you'll typically run this once per filing season for the previous calendar year.

  3. Short-term P&L card

    Realized gains/losses from lots held LESS THAN 1 YEAR before selling. Short-term gains are taxed as ORDINARY INCOME (your marginal rate — typically 22-37% federal for most filers). Short-term losses can offset short-term gains first, then long-term gains, then up to $3000 of ordinary income.

  4. Long-term P&L card

    Realized gains/losses from lots held 1+ YEAR before selling. Long-term gains qualify for PREFERENTIAL CAPITAL GAINS RATES (0% / 15% / 20% federal depending on income bracket). Long-term losses offset long-term gains first, then short-term gains, then ordinary income.

  5. Total realized P&L card

    Sum of short-term + long-term. This is the headline number that flows to your tax form 8949 → Schedule D. The lot count below it tells you how many matched lots produced that total — useful for sanity-checking against your bot dashboards.

  6. Method comparison card

    Side-by-side P&L for ALL THREE methods on the SAME trades. The "best" method (lowest total P&L = lowest tax bill) is auto-highlighted. HIFO usually wins, but not always — when all your lots have similar cost basis (e.g. a Grid Bot trading in a tight range), the methods can tie or even invert.

  7. Educational explainer (collapsible blue card)

    Click "Understanding FIFO / LIFO / HIFO" to expand a full plain-English explanation including the most-asked question: "why doesn't this match my Grid Bot / Smart Trade dashboard P&L?" The short answer is your bot shows per-strategy P&L; the IRS treats all your ETH as one pool regardless of which bot bought it.

  8. Export CSV

    Downloads every matched lot as a CSV — Asset, Qty, Acquired date, Sold date, Cost Basis, Proceeds, Gain/Loss, Term (short/long), Holding Days, Source (which bot/surface generated it). File is named `haythix-tax-{METHOD}-{YEAR}.csv`. Drop this into TurboTax, Koinly, CoinTracker, or your CPA's template.

  9. Refresh

    Re-runs the cost-basis engine. The engine is deterministic — same fills always produce the same lots — so you only need to refresh after placing new trades or after changing your tier/account configuration.

Tips & pitfalls

  • Not tax advice. The numbers are computed from your fills on this platform — external wallets/exchanges that aren't connected won't be included. Always reconcile against your CPA's draft before filing.
  • HIFO is almost always the lowest-tax outcome, but it requires "specific identification" — you must document the method on Form 8949. Most modern tax software handles this automatically; older CPAs may default to FIFO.
  • Switching methods between years is legal but draws IRS attention. Most filers pick one and stick with it. Talk to a tax pro before switching.
  • Short-term losses are MORE valuable to harvest than long-term losses (they offset higher-tax ordinary income first). The [Tax Strategy](/tax-strategy) page surfaces these as the top harvest priority.
  • The Method Comparison only varies by lot-matching. If you have only 1 fill, all three methods produce identical numbers (there's only one lot to draw from).
  • Volatile-quote pairs (ETH/BTC, SOL/ETH) are skipped from the lot ledger because USD basis can't be honestly assigned without an oracle. Those fills won't appear here. Coming post-launch with optional oracle pricing.
  • Export CSV BEFORE filing, even if your CPA does the final return. Having an audit trail of what numbers you computed is part of due diligence — especially important if you ever get an IRS query.