Are there any limitations on the amount I can deduct for losses in cryptocurrencies?

1 answers

• Rohit JuyalDec 24, 2020 · 5 years ago
  When it comes to deducting losses in cryptocurrencies, there are some limitations that you should be aware of. The IRS treats cryptocurrencies as property, so the rules for deducting losses are similar to those for other types of property. In order to deduct losses on cryptocurrencies, they must be considered a capital loss. Additionally, there is a limit on the amount of capital losses that can be deducted in a given tax year. As of 2021, the maximum amount that can be deducted for capital losses is $3,000 for individuals and $1,500 for married couples filing separately. Any losses beyond this limit can be carried forward to future years. It's important to keep accurate records of your cryptocurrency transactions and consult with a tax professional to ensure you are following the proper guidelines and maximizing your deductions.
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