Tips for claiming tax losses from the US Internal Revenue Service
Cryptocurrency volatility is nerve-wracking and may not end yet. The turmoil could make cryptocurrency investors and crypto-related companies less excited than they were when prices seemed to be rising. If the market falls off a cliff, you will incur huge losses in your taxes, right? not necessarily. As US dollars fluctuate in the digital world, it is worth asking if there is a soft drink that you can earn by claiming your tax losses.
First, ask what happened from a tax perspective. If you traded and made big taxable gains, but then the bottom line dropped, the first thing to consider is whether you can pay your taxes on the gains you made this year. Taxes are annual and generally based on a calendar year unless you have duly chosen otherwise. Start by saying that whenever you sell or exchange a cryptocurrency for cash, another cryptocurrency, or for goods or services, the transaction is a taxable event.
Robert W Wood A tax attorney representing clients worldwide from Wood LLP’s San Francisco office, where he acts as a managing partner. He is the author of several tax books, and he writes regularly on Forbes Taxes, Tax Notes, and other publications.
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