The tax rules for the crypto industry is very haphazard, and this makes it important for investors to save their Bitcoin and other crypto taxes. If you don’t consider this option, it is likely that you will end up paying a lot of those gains to the government. Yes, the same government that doesn’t like crypto, makes no effort to make good laws but yes wants your gains. So, what is this all about?
How to save Bitcoin taxes?
Even though Bitcoin is a currency, it is not considered one by the government. It is treated as an asset that you have to pay capital gains tax on. The term here is “wash sales” which will help you to save taxes. In general, it does not apply to the securities, but since BTC is being treated as a property, it is applicable to the same. One can sell their coins and rebuy within 30 days to do a tax loss harvesting and use it to reduce the tax they pay. For this, it is important that people take advantage of the long term capital gains tax and also track the prices of their Bitcoin transactions properly.
Do note that even though this loophole exists, it is probable that the IRS totally invalidates the transactions. Already the authorities are doing their best to make sure that Bitcoin is aggressively taxed. They are keeping a close eye on the transactions to make sure that everything is tax compliant. In the near future, this loophole might not exist; therefore, it is important that if you want to, then take advantage of this now.
There is a need for proper tax laws.
Bitcoin’s tax laws are very aggressive, and any normal investor will be hardly left with any profits after the taxes. The government is taking too much away from the investors, and it is kind of worrisome that such a thing is happening. Back in May, even the markets crashed when the government announced such high tax rates for the crypto markets. So, it is important that proper laws and made and the market is regulated. And all this without taking half of the investor’s profits.
What are your thoughts on the method to save Bitcoin taxes? And do you think that the government will bring proper tax regimes soon? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.