Koinly’s head of tax give a description about today’s condition
Koinly is one of the most widely-used crypto tax accounting firms online.
Head of tax Danny Talwar told Cointelegraph that;
While most retail investors are aware of their obligation to pay capital gain taxes (CGT)
When they make profits, many are unaware that the opposite holds true
And that losses can be used to reduce their overall tax bill by offsetting capital gains elsewhere.
“Most people are familiar with the concept of tax on gains […] But what they’re not doing is realizing that they can recognize that loss on their tax return to then offset against gains.”
Therefore, Koinly’s head of tax explains;
Crypto investors, particularly those that bought in toward the top of the market in 2021
May be able to find some salvation through a tax-saving strategy
That called “loss harvesting”
Loss harvesting, also known as tax-loss harvesting or tax-loss selling
It is an investment strategy where investors either sell, swap, spend or even gift an asset that has fallen into the red
It also known as making a “disposal” or allowing them to “realize a loss.”
Koinly’s head of tax also said;
“Countries like the U.K., U.S. Canada, follow very similar capital gains tax regimes to Australia or have a kind of loss harvesting,”
“The more relevant point is if you’ve made a sale during the tax year, and you’ve sold at a loss, there’s basically a benefit there that people might miss out on if they don’t put it in their tax return.”
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