Crypto Assets

Investors Could Save Thousands in Taxes by Declaring Crypto Assets

Bitcoin was expected to reach $25,000 by the end of 2018. Unfortunately, this couldn’t happen that perfectly. What to speak of climbing the hill, bitcoin even fell to $3,127 the previous year, which is down 86% from its all-time high.

This bearish sentiment wasn’t limited to Bitcoin only. The investors long on other digital assets, like Ripple, Ethereum, and Cardano which lost massive amounts of investments last year. The cryptocurrency market wiped off 86% of its market capitalization since its all-time high.

And it left its investors either holding as long-term believers or simply exit their positions for fiat on successive lower-low formations.

Still, there is a silver lining for anyone bearing those losses, initially for investors who live in a nation that charges capital gain tax on crypto earnings. And it works when they declare their crypto balance sheets in their yearly tax return.

Capital Gain Losses

Various nations have different capital gains laws so that their method of deducting taxes depending on investment losses should differ likewise. For instance, in the US, taxpayers can apply for deductions depending on “realized capital gain losses,” that means declines suffered amid the current fiscal year.

The UK treats the capital gain losses in somewhat a similar manner. The Treasury’s guidance perfectly states that investors need to pay capital gains tax on any of their earning made by Bitcoin or any other cryptocurrency over the annual exempt amount of £11,700.

In the meantime, the UK taxman helps taxpayers to deduct taxes on the future gains. Taxpayers who somewhat made gains amid the bearish crypto year can offset them into tax-friendly investments in the UK.

In Canada, the taxable capital gain/loss is 50% of the profit/loss. The nation’s tax authority dependably brings capital gains tax on digital currencies into law.

According to Raymond Chabot Grant Thornton

“Allowable capital losses can only be deducted from taxable capital gains. If you have generated capital gains during the year, an evaluation of your portfolio prior to year-end may enable you to minimize income taxes by realizing unrealized capital losses, as the case may be. Any capital loss that is not deducted in one year may be carried over and deducted from taxable capital gains of any of the three preceding years or of any subsequent year.”

Crypto Frauds

In case, investors have suffered financial losses owing to crypto frauds, then they also become liable to find relief from their taxing authorities in the US, the UK and Canada.

For example, ICO investments, could fit the purpose in those cases, having been cost their financial experts combined losses of billions of dollars.