Crushed by Crypto Losses? Here Are Some Tax Tips.
Learn the IRS rules and act promptly, and you could get a tax benefit for years to come to ease your pain.
MIstakes were made.
Photographer: Marco Bello/Getty Images
Investors in Bitcoin and other digital assets have been pummeled recently by the longest losing streak since 2011. If that’s you, you might be glad to hear that there are ways to ease some of the sting of those losses: Act promptly and you can cut your tax bill for next April and beyond.
The Internal Revenue Service allows taxpayers to use losses in stocks and other investments, including crypto, to offset gains. If your losses exceed your total gains for the year, you can deduct up to $3,000 against your taxable income. Losses beyond $3,000 can be carried forward every year until death to offset gains in future years.