As “cute” as FIFO & LIFO may sound, they are not the names of stuffed animals. Instead, they are more commonly referred to as “First-In-First-Out” or “Last-In-First-Out” and used for tax lot treatment in stock trading.
By default, all tastyworks accounts are set to FIFO. You may request to change your account’s tax lot from FIFO to LIFO tax lot treatment by contacting us at email@example.com. Your selected tax lot treatment will only apply to trades your trades going forward and cannot be applied retroactively. Furthermore, tax-lot selections are not possible for cryptocurrency trades.
Furthermore, if you want to make a tax lot treatment change to your account after closing a trade, you may do so BEFORE the trade settles (stock trades settle T+2 (trade plus 2 days), and options settle T+1). Just contact our trade desk at firstname.lastname@example.org. Please include as much information as possible, such as the symbol, quantity, original opening date and total cost, and closing trade date with total proceeds.
Is FIFO or LIFO better? Well, that’s a loaded question because there are a lot of moving pieces to consider when choosing one tax lot treatment over the other. We advise speaking with a tax professional to determine your best tax lot treatment.