Bitcoin investors may want to forget 2018. First, they should file their taxes.
“[Last year] was essentially a blood bath for most crypto investors,” said Tyson Cross, a tax attorney in Reno, Nevada.
The digital coin began last year trading at around $15,000, compared with $3,400 today.
Still, only around half of Bitcoin investors plan to report their losses to the IRS, according to a survey of some 1,000 people conducted in November by personal finance company Credit Karma.
Their reasons for staying quiet? Not knowing if they can deduct their losses, or believing they don’t have to.
Perhaps more important: Others could be skittish to report their losses if they never shared their gains with the IRS, said Selva Ozelli, a CPA and tax lawyer.
“Taxpayers didn’t [used to] report their Swiss bank accounts,” Ozelli said. “These crypto traders could be following the same logic.”
Or, some could be trying to save time, Cross said. “Crypto investors probably think it’s easier to file their tax return without the crypto losses,” he said.
The bottom line, however: “Taxpayers must report any and all asset sales, including sales of crypto,” Cross said.