How is anyone supposed to distinguish the first 10 BTC from the last 10 BTC when the underlying satoshis might not even be the same? e.g. I might transfer those 10 BTC to an online store (web wallet, other trading, whatever) but then transfer them back, except I'll likely get a different 10 BTC. Seems like all you can determine is that you once bought $x and once sold $y. Since you can also exchange btc for goods, or mine it (which I believe even the IRS has different rules for), you can't say with certainty whether it must be $y <= $x or $y >= $x. So when you sell 5 BTC, it's either mining income (or other income) or a capital gain, but it seems like there's nothing stopping someone from always taking the least expensive taxes first.
jdmichal|9 years ago
That's all that matters. Your gains (or losses) are $y - $x.
> it seems like there's nothing stopping someone from always taking the least expensive taxes first.
Yes. If you had some with gains and some with losses, you could even choose to sell those at a loss in order to offset other gains.