FIFO cost basis reporting seems sensible. An interesting question though is what if you keep your virtual currency in a number of exchanges (for instance, to reduce risk in case of hacking)? Do you apply FIFO across all exchanges/wallets, or within each separately? The former seems the most natural to me since it simplifies your recordkeeping and computation of cost basis; but the question is, what do you think is the most likely interpretation of the law?