Thank you

Forum|Forum|1 year ago
December 13, 2024
1 reply
14 views

thanks

Opus 17

Level 15

You don't want a tax deduction for your losses? (Note, crypto is still a bit of a gray area. If you were holding crypto for personal use -- like buying and selling stuff -- losses are not deductible. If you were holding it for investment purposes, losses are deductible against other gains and partially against other income.)

Most of the time, you won't run into a problem by not deducting losses. However, if by not deducting a loss, you qualify for some benefit that you would not qualify for if you did deduct the loss, not deducting the loss could be considered tax fraud.

Also, there could be a bit of a question about whether a particular loss is a business loss or theft. Theft losses are not deductible unless due to a federally declared disaster, like a wildfire or hurricane. If the exchange failed because it was a badly run but otherwise legitimate business, then you could deduct your capital losses (if the assets were held for investment). But if you lost money because the whole scheme was intentional theft (like a rug pull), that's not deductible regardless of whether the crypto was held for investment or for personal use.