I’ve written a Tax Brief discussing long-term U.S. tax planning for cryptocurrency investors. Every such investor must be fully aware of the potential tax traps and planning opportunities involving cryptocurrencies. My Tax Brief runs the gambit from absolute disaster and financial ruin to extremely favorable taxation, including in some cases, cryptocurrency gains without federal or state taxation. Here are excerpts from my Tax Brief – you decide whether spending $9.95 for this information is worth it:
Beware – Major Tax Trap!: Trading in cryptocurrencies carries a huge tax risk! Losses from one calendar year cannot be carried back to offset gains from prior years. This drawback often occurs with day traders of securities and others who do not understand how the capital gain and loss rules work. Consequently, taxpayers can generate a huge tax without retaining sufficient assets to pay it.