Credit Karma: Confusing US Crypto Tax Laws May Lead to $1.7 Bln In Losses Go Undeducted

    Back in 2018, the cryptocurrency community in the United States decided to sell assets and pay the large tax bills after the massive bull run experienced in 2017. In 2017, Bitcoin (BTC) moved from under $1000 up to $20,000 by the year end, allowing several users to become millionaires in just a year.

    However, in 2018, the market experienced a bear trend that made Bitcoin and other digital assets lose more than 80% of their value. Indeed, some virtual currencies lost more than 95% of their price. Due to the fact that the tax season is coming once again, investors would have to liquidate assets and lock in realized losses.

    According to new data, just 34% of the losses that American investors experienced in 2018 have been realized. That means that several individuals in the country still do not understand how crypto tax laws work. It is possible for investors to claim the losses on their taxes.

    As per data provided by the services company Credit Karma, US citizens have experienced losses of $5 billion after the bear market that affected the whole crypto space. However, just $1.7 billion of these losses will be realized losses.

    Taxpayers in the United States trigger a taxable event as soon as they sell a crypto asset. That means that depending on how much the asset has appreciated or depreciated is what will determine which is the amount of taxes that the investor must pay. However, if the assets are not sold, they are just paper gains and do not trigger any taxable event.

    Jagjit Chawla, the general manager of Credit Karma commented:

    “Even though those who sold their Bitcoin at a loss can typically claim a tax deduction, we found that before taking our survey, 61% of respondents who lost money on Bitcoin didn’t actually realize they could get a tax deduction for Bitcoin losses.”

    Some taxpayers did not know that they could even register their losses on their taxes, while others believed that the losses they had were too small to request a tax deduction.

    By locking in cryptocurrency losses, users and investors can receive a tax reduction of $3,000 on their tax bills. If the funds lost exceed $3,000 they can be included the next year. This would be very positive if the market moves towards a new high or starts to grow in 2019.

    Get Free Email Updates!

    *Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

    I will never give away, trade or sell your email address. You can unsubscribe at any time.

    Bitcoin Exchange Guide News Team
    B.E.G. Editorial Team is a gracious group of giving cryptocurrency advocates and blockchain believers who want to ensure we do our part in spreading digital currency awareness and adoption. We are a team of over forty individuals all working as a collective whole to produce around the clock daily news, reviews and insights regarding all major coin updates, token announcements and new releases. Make sure to read our editorial policies and follow us on Twitter, Join us in Telegram. Stay tuned. #bitcoin

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


    Please enter your comment!
    Please enter your name here


    Live Bitcoin Price & Latest BTC Charts

    Today's Latest Crypto News

    Indian State Telangana Govt Launches Blockchain Accelerator With Tech Mahindra

    The IT arm of Mahindra Group and the Telangana government have closed a partnership and aims to launch a blockchain accelerator that will be...

    Ripple Co-Founder' Claims His XRP Sell-Off Doesn't Impact The Market Is ‘Simply Preposterous'

    XRP Whale and former Ripple CTO argues his huge sell offs Not possible to sell off over 2% of the total supply without...

    Ripple (XRP) Price Analysis (February 19)

    Key Highlights The US dollar has now forced the XRP price value into a range trading condition. The XRP/USD price now hovers around $0.30...

    Microsoft Azure Integrates Lition’s Blockchain Tech to Scale Commercial Operations

    Microsoft is one of the fast-moving IT giants in blockchain research for leverage with their existing services. The firm recently integrated Lition blockchain which...

    European Space Agency to Use Blockchain-Powered Satellite Data For Mining Transparency

    Blockchain tech is fast on the track of providing solutions from space despite a skeptical approach towards its major use as per now ‘cryptocurrencies’....

    BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.