According to a report from Credit Karma, US bitcoin investors who decided to exit the bitcoin market lost $1.7 Billion. Unrealized losses, belonging to those who didn’t sell, account for $5.7 billion. Credit Karma GM Jagjit Chawla believes many Americans don’t know they can qualify for a crypto tax reduction as a result of their losses. “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.” A US citizen who locks in their crypto losses could claim up to $3,000.
Many bitcoin investors and traders don’t know that selling bitcoin could be considered a taxable event. While most people are aware of the potential ramifications of underreporting income, what many don’t know is that not reporting losses could result in missing out on valuable deductions. With crypto investors suffering losses throughout 2018 as prices fell by up to 90%, this seems fairly important.
TaxToken is a BaaS startup that assists investors and traders keep track of their crypto tax. Incorporating blockchain technology and artificial intelligence, TaxToken can automate the crypto tax filing process. This means quick, easy, and mistake-free crypto tax filing. TaxToken co-founder Nathan Nichols recognizes the issues many people have had when dealing with crypto tax.