US Investors Lost $1.7 Billion Due to Bear Market; These Losses May Be Tax Deductible
2018 was not so long ago that you do not remember how bad it was, right? Bitcoin started the year priced at around $20,000 USD and it ended in about $4,000 USD. Yeah, it lost 80% of its value in a single year. This created a huge loss for most investors, but we did not know how much it was until recent developments.
Now, a recent survey made with US investors who sold their BTC last year shows that they have lost $1.7 billion USD and, yet, a lot of them do not even plan on deducting their losses. The survey was made by a company called Credit Karma and published yesterday, January 15. Credit Karma is focused on personal finances.
A Lot Of People Will Not Deduct Losses, Why?
According to the research, 53 percent of all Americans will report their Bitcoin gains and losses to the government, which is a fairly low number since they are required by the law to do it. 19% are still undecided at the moment and the other 35% are not keen on reporting their losses at all.
While some people have actually won money and they are basically practicing tax evasion by not reporting their money (which may cause them trouble in the future, as Bitcoin is easier to track than most people think it is), some people are actually getting a very bad deal out of not reporting because they lost money.
The main reason for both investors is that they do not believe that they either lost or won enough money to be worthy of reporting. This is a mistake, though, as both cases can actually lead to lose money later.
If they lost money, they can always get some refunds for actually losing the money on investments. On the other hand, the legislation in the US is not very clear on Bitcoin, so not reporting may also cause all sorts of problems if you did win money.
In fact, a lot of people did not even know that they could get tax deductions for their losses, as 58% of the people did not know this at the time of the survey.
We all hope that the Internal Revenue Service (IRS) of the United States can actually publish clearer guidelines for the taxpayers in 2019, as most of the information is not enough so far. It is partly because of this that so many people simply do not know what do with their crypto losses and gains in 2018.