$1.7 billion lost in Bitcoin, yet only 53% of U.S. investors plan to file it on their taxes
After the fall of Bitcoin’s highest value, approximately $20,000 U.S.D. per coin, investors from the U.S. lost a collective amount of $1.7 billion.
In Nov. 2018, American personal finance company, Credit Karma, contracted Qualtrics to conduct an online survey on American Bitcoin holders from the ages of 18 and up to inquire and learn more about their plans and investments surrounding Bitcoin.
Out of the 1,009 participants, only 53 percent plan to actually report their Bitcoin investments, either losses or gains, to the Internal Revenue Service (IRS). Out of the remaining 47 percent of participants, 35 percent of those who lost money said they would not report their losses to the IRS, and 19 percent haven’t decided what they’re going to do.
According to Credit Karma’s findings released on January 15th, many Bitcoin investors (55 percent) didn’t know, or (35 percent) believe they were required by law to report their gains or losses in crypto. Furthermore, 22 percent stated that they didn’t even know how to go about reporting their Bitcoin gains or losses.
The IRS considers cryptocurrency as security, which means it’s treated under the same tax laws that apply to physical property, stocks or bonds. Underreporting or not reporting cryptocurrency gains or losses at all can result in the investor being audited and paying hefty fines with interest.
Check out our cryptocurrency tax strategies on how to increase your tax savings here.