Tax implications and potential risks to new crypto investors

/u/jazzywaffles84Cryptocurrency News & Discussion https://ift.tt/eA8V8J

Hey all!

Just a reminder to those who were not involved in crypto during the 2017/2018 sell-off. Be aware of your tax liabilities. I am not a financial or tax advisor, but have a few points that you should be aware if to bring to your advisor.

1. All trading from 2020 (including crypto to crypto) can be held against you for gains in USD at the time of the trade. If the crypto market pulls back between January-April you may be at risk of having to sell all your holdings at a loss to pay your taxes. This risk has financially ruined lots of people in 2018 after 2017 (owing money that is no longer there.)

2. Safeguard yourself by having cash set aside for what you potentially would owe

3. If you have not traded yet in 2020, but are contemplating the rediversification of your crypto assets. It might be a good idea to readjust AFTER Jan 1st.

4. If you are holding an asset that has declined by a lot, (i.e. XRP) and already sold some BTC for a profit... you can sell some XRP at a loss to balance your capital gain/loss. I suggest partnering with an advisor for this one.

Any other tips you know of? Feel free to share

submitted by /u/jazzywaffles84
[link] [comments]

from Cryptocurrency News & Discussion https://ift.tt/38MRGNF
via