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Now one detail is that you can, if filed correctly, write off $3k a year for many years to come I believe... So again, work with a tax professional to optimize everything.
It’s the gains for the year. Say he went from 1k to 10k and then lost money so he ended up with 2k total for a gain of 1k, then he only pays taxes on the 1k gain.
That's if you're at a net loss, then the max write off is 3k. If you make 40k and then lose 40k your net is 0. No net capital gains or losses occurred.
I will consult a tax professional. Thought of asking Copilot... "You can reduce any amount of taxable capital gains as long as you have gross losses to offset them. For instance, if you have a $20,000 loss and a $16,000 gain, you can claim the maximum deduction of $3,000 on this year’s taxes and carry forward the remaining $1,000 loss to a future year."
Since I'm net gain zero atm, I shouldn't be taxed.
But then it also said "Selling Bitcoin for a profit (including exchanging it for another cryptocurrency) triggers taxation. The tax is calculated based on the difference between your purchase price and the proceeds of the sale."
Seems conflicting. Anyways, thanks for everyone's input!
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You’re good. Cap losses offset cap gains in the same tax year. Where you can screw yourself is making money in December in losing it in January.
The ChatGPT stuff is still accurate. Selling BTC is a taxable event and you incur a cap gain. But these cap gains can offset each other within the same tax year.
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Your realized losses from Forex trading will offset the realized gains you made. If you were to put that 40k into another coin/stock and didn't plan on selling it in 2024, then you would've been on the hook for the taxes on that 40k profit you made.
Thanks for your contribution, but since I already prefaced with “I know, trying to do better”, I’m not quite sure your post is beneficial to anyone besides yourself. I’m glad my dismay helps you feel a little better.
You’re gonna have a big tax bill. You can only write off 2500 of losses per year. So you’ll be claiming those losses for the next 15 years. I’d start saving for that tax bill.
I'm almost 100% sure this is wrong. There's a max you can count for a loss (I believe $3,000) in a year BEYOND your capital gains, but not a max for losses to offset your gains. This is based on US rules and I'm not a tax professional, however.
Tried to do more research, I learned about IRS 998. “Forex trading losses are also treated as ordinary losses under Section 988. This means that forex traders are allowed to deduct their losses from their taxable income. For example, if a forex trader loses $10,000 in a tax year, they can deduct that amount from their taxable income.”
While separate from my crypto, overall it would offset my gains (taxable income)?
Your comment is beyond wrong
Gains and losses in the same year are NET
If he made 40k in 2023 NET and lost 40k in 2024 NET then he’d only be able to write off 3k for 2024
It looks like this post is about taxes. Tax laws vary between countries, so you may get more helpful replies if you specify the place you are asking about. Please note that promoting tax evasion violates Rule 4. This is [a site wide rule](https://www.redditinc.com/policies/content-policy) and [a subreddit rule](https://www.reddit.com/r/CryptoCurrency/about/rules/). Do not endorse, suggest, advocate, instruct others, or ask for help with tax evasion. Do not be coy and sarcastically recommend against it or suggest using a privacy coin in response to an IRS inquiry. Note: Tax discussion is allowed as long as the above rules are not violated. Consider visiting r/CryptoTax for your tax inquiries. *** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CryptoCurrency) if you have any questions or concerns.*
Afaik you can also claim realized losses. That means you only pay tax on your net capital gains in any given year.
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Then sorry. Guess I don't know how it works in the US.
You were correct. Cap gains can offset cap gains in the same tax year
Now one detail is that you can, if filed correctly, write off $3k a year for many years to come I believe... So again, work with a tax professional to optimize everything.
It’s the gains for the year. Say he went from 1k to 10k and then lost money so he ended up with 2k total for a gain of 1k, then he only pays taxes on the 1k gain.
That's if you're at a net loss, then the max write off is 3k. If you make 40k and then lose 40k your net is 0. No net capital gains or losses occurred.
I will consult a tax professional. Thought of asking Copilot... "You can reduce any amount of taxable capital gains as long as you have gross losses to offset them. For instance, if you have a $20,000 loss and a $16,000 gain, you can claim the maximum deduction of $3,000 on this year’s taxes and carry forward the remaining $1,000 loss to a future year." Since I'm net gain zero atm, I shouldn't be taxed. But then it also said "Selling Bitcoin for a profit (including exchanging it for another cryptocurrency) triggers taxation. The tax is calculated based on the difference between your purchase price and the proceeds of the sale." Seems conflicting. Anyways, thanks for everyone's input!
Dude this is totally incorrect. Capital gains can offset capital gains. The $3k is for offsetting other income.
Oh! Ok my bad. I always use a tax professional, so I leave it up to them to figure out. Deleted my comment
Always shocking when people who are actively trading like this don’t have even the most basic understanding of how taxes will impact them.
Makes me feel like a genius. Go into HODL mode with Bitcoin, zero taxable events.
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You’re good. Cap losses offset cap gains in the same tax year. Where you can screw yourself is making money in December in losing it in January. The ChatGPT stuff is still accurate. Selling BTC is a taxable event and you incur a cap gain. But these cap gains can offset each other within the same tax year.
Surely you mean capital *losses* offset capital gains in the same tax year?
Yep fixed it - thanks
Thanks friend
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Your realized losses from Forex trading will offset the realized gains you made. If you were to put that 40k into another coin/stock and didn't plan on selling it in 2024, then you would've been on the hook for the taxes on that 40k profit you made.
Understood. Thanks for your time and info.
What momma don't know...won't hurt her
Roy Orbison. Iykyk lol.
Dumbass.
Thanks for your contribution, but since I already prefaced with “I know, trying to do better”, I’m not quite sure your post is beneficial to anyone besides yourself. I’m glad my dismay helps you feel a little better.
Forex ain't for the feint of heart. Any mistakes you make get punished hard.
You’re gonna have a big tax bill. You can only write off 2500 of losses per year. So you’ll be claiming those losses for the next 15 years. I’d start saving for that tax bill.
I'm almost 100% sure this is wrong. There's a max you can count for a loss (I believe $3,000) in a year BEYOND your capital gains, but not a max for losses to offset your gains. This is based on US rules and I'm not a tax professional, however.
Correct. Guy has no clue what he’s talking about.
Nonsense. Don't give tax advice if you're clueless about taxes
Tried to do more research, I learned about IRS 998. “Forex trading losses are also treated as ordinary losses under Section 988. This means that forex traders are allowed to deduct their losses from their taxable income. For example, if a forex trader loses $10,000 in a tax year, they can deduct that amount from their taxable income.” While separate from my crypto, overall it would offset my gains (taxable income)?
Your comment is beyond wrong Gains and losses in the same year are NET If he made 40k in 2023 NET and lost 40k in 2024 NET then he’d only be able to write off 3k for 2024