Tax loopholes in data encryption

As early as 2022, with all login password markets entering the "severe winter" of nearly months, some investors could have used the benefits of this decline in tax returns to choose an idea called "tax loss gains". This strategy is very helpful to investors and investors whose net worth has shrunk. Although it will not help to take advantage of this opportunity now, there is no doubt that it can be used to lay the foundation for the present early.

Tax loss is a countermeasure in which an investor can offset capital gains with asset losses, thereby reducing his tax bill. Fundamentally, it involves the sale of project investments with reduced use value in order to achieve asset losses and is suitable to offset the capital gains from the sale of other investments. In that way, the investor reduces his overall taxable income and reduces his tax time. Tax loss is usually used in the stock market, but it can also be used to invest in cryptocurrency projects. According to the careful management method of his asset allocation and strategic sale of loss trading positions, login password investors can use the gains from tax losses to minimize his tax returns and retain more profits.

How does this benefit Crypto investors?

The Internal Revenue Service (IRS) treats digital currencies as assets. When it is sold at a loss, it means it cannot return to the amount it normally bought, and the government will allow investors to use this loss to offset capital gains, that is, gains from other investments. If investors' annual asset losses exceed their capital profits for the current year, they can deduct a loss of up to $3000 from their normal income when filing data encryption tax. It should be noted that the same type of loss can only be used to offset the same type of profit. We can only use other long-term losses to offset long-term profits, and the same is true in the short term. if cryptocurrencies are sold in less than a year, the profits can easily be offset by short-term losses.

Today, contrary to the phenomenon of US stocks, the "hand washing disinfection standard" is not suitable for cryptocurrency trading at this stage. According to the relevant regulations of the IRS, this clear regulation requires that if investors sell securities at a loss and exchange them for the same securities or "basically consistent" securities at the time of sale or within 30 days after the sale, you can't apply for a tax cut. This suggests that, in theory, login password investors can sell cryptocurrencies, report losses, and then buy again before the most typical 30-day waiting period. In doing so, he / she will not be bound by cleaning market sales standards.

However, field experts point out that if investors continue to sell cryptocurrencies at a loss and then buy the same digital currency again, the IRS may reject tax incentives.