If Bitcoin Price Drops — an Opportunity for Crypto Tax Planning
Or Lokay Cohen's original article for cointelegraph.com reduced by 79%
After many countries around the world such as the United States, the United Kingdom, France, and Portugal published their own cryptocurrency tax guidelines this year, it is only reasonable they will expect to see an increase in crypto tax filing. They may even follow suit with the U.S. Internal Revenue Service and begin their own crypto tax compliance campaign.
The recent drop in Bitcoin price presents traders with a great opportunity to reduce tax liabilities accumulated since January 2019.Many people don't know it, but cryptocurrency tax liability can be significantly reduced by a recently developed practice called crypto tax planning. If you have made profits from crypto trading since the beginning of this year, and have some losses now that the price has fallen, you can offset this loss and reduce your tax liability. You may benefit from tax planning based on the specific identification method even if you did not accumulate crypto activity profits this year and instead incurred capital losses.
As the tax season of many countries begins in two months, there is one month left to plan your crypto tax liability for this current year. For maximum accuracy on your tax planning, you can use a crypto tax platform that will check all of your crypto addresses and recommend which one to use.
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