How does the IRS treat short term capital losses offsetting ordinary income from cryptocurrency investments?

3 answers

• Nov 25, 2021 · 3 years ago
  According to the IRS, short term capital losses from cryptocurrency investments can be used to offset ordinary income. This means that if you have made a profit from other sources of income, such as a regular job or rental property, you can deduct your short term capital losses from your cryptocurrency investments to reduce your overall taxable income. However, it's important to note that there are certain limitations and restrictions on the amount of capital losses that can be offset against ordinary income. It's always advisable to consult with a tax professional or accountant to ensure compliance with IRS regulations.
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• Nov 25, 2021 · 3 years ago
  Hey there! So, when it comes to short term capital losses from cryptocurrency investments, the IRS allows you to use them to offset your ordinary income. This means that if you made some bad trades and ended up losing money, you can deduct those losses from your regular income. It's like turning a negative into a positive! But remember, there are some rules and limits to keep in mind. It's best to consult with a tax expert to make sure you're doing everything by the book.
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• Nov 25, 2021 · 3 years ago
  At BYDFi, we understand that short term capital losses can be a bummer. But don't worry, the IRS allows you to offset those losses against your ordinary income from cryptocurrency investments. This means that if you had some unsuccessful trades, you can use those losses to reduce the amount of taxable income you have to report. However, it's important to follow the IRS guidelines and consult with a tax professional to ensure you're doing everything correctly. Remember, taxes can be complicated, but we're here to help!
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