How Do You Report Crypto Losses in Arizona for Tax Year 2022?

[AZ-Taxes]

I am now working on my Arizona taxes in TurboTax and I came across this question, "Do you want to make an Arizona depreciation adjustment for property sold or otherwise disposed of during 2022?" Just like the IRS, Arizona considers crypto a property. Do cryptocurrency losses fall into this category (Arizona Depreciation Adjustment) in Arizona? For example, if an Arizona resident had crypto losses of $10,000 in 2022, does that mean the person can add the $10,000 under the Arizona Depreciation Adjustment for Property Sold?  If not, where should the crypto losses be reported for the Arizona tax section in TurboTax?

[JohnB5677]

In the case you describe it sounds like the Crypto losses were posted to your Federal return similar to stock losses.  This is the correct way to account for the loss, and it will carry over to your Arizona return.  So, there is no need to make any adjustment.

You are correct that Crypto is considered property by the IRS.  However, it is a hybrid.  It is not a depreciable asset.

[AZ-Taxes]

Thank you for your response.