In Spain, for calculating capital gains, the FIFO (first in, first out) method is used.
This rule applies to assets of the same class—for example, multiple purchases of ETH are treated as interchangeable units.
What is FIFO (First In, First Out)?
FIFO is an accounting method used to determine which assets are considered sold when you dispose of part of your holdings—such as selling cryptocurrency.
Under FIFO, the first assets you bought are considered the first ones you sell, regardless of the actual tokens or coins sent in the transaction.
Example:
1st February: User A buys 0.5 ETH for €1,000 (ETH price: €2,000)
7th April: User A buys 1 ETH for €1,600 (ETH price: €1,600)
3rd June: User A sells 1 ETH for €1,800 (ETH price: €1,800)
FIFO Calculation:
The first 0.5 ETH sold comes from the February purchase, the next 0.5 ETH from the April purchase:
Gain/loss calculation is as follow:
[(0.5*2,000)+(0.5*1,600)]-(1*1,800) = 0
How to compensate gains and losses
Losses incurred from cryptocurrencies can only be offset against gains from other cryptocurrency transactions.
Any unused losses can be carried forward for up to four years.
After this period, if they remain unused, they may be applied to offset up to 25% of gains from other types of income, such as dividends or bond interest.