Wall Street Journal: the sale and the imminent redemption of Bitcoin can reduce the costs for taxes
Source:
The article Wall Street Journal of December 21, investors are advised to sell and then buy back their bitcoins to save on taxes. It also States that in 2018 the only positive thing for cryptocurrency is «tax break». Given the fact that the internal revenue service (IRS) in 2014 considered coins as an investment property like stocks and bonds, not currency users of cryptocurrency are supposed to use the “special and often vulnerable” the country's tax policy towards investment.
For all investments in the United States — whether stocks or crypto — currencies- short-term gains and losses relate to savings that were held during the year or less. In this case, any profit is subject to tax in the amount of 40.8 per cent. While long-term profits and losses are subject to the payment of taxes in the amount of 23.8 percent.
However, to compensate for taxes on income from all investments, you can use losses to good use. The potential tax exemption for the cryptocurrency may prove to be more than for traditional assets. This «life hack» taxation in the United States allows traders to sell and reinvest its own cryptocurrency fully within the law.
This became possible because cryptocurrencies are not subject to the so-called rule against «wash trading». They do not allow deductions for taxes, if the investor acquires the new securities within the next 30 days after selling at a loss, Cointelegraph writes.
As has told WSJ a specialist in CPA and cryptocurrency in Deloitte Tax Jim Calvin, traders just need to wait a day or even an hour to lock in losses, then it is possible again to buy crypto without going beyond the law.
It is Important to note that this trick is not retroactive. If a trader in the United States sold scriptactive in income for 2017, he would not be able to compensate for the already accrued taxes. As previously reported, prior to the close of the previous tax year, the IRS received only 0.04 percent of tax returns of profit from investment in crypto currencies.
Recall that in July 2017, the IRS demanded that the largest us crypto currency exchange Coinbase detailed information about each users to identify those who are evading taxes. More data to search for .
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