How will you report your crypto taxes? There are several strategies available to help investors cushion the blow.
“This is probably the most actionable tax strategy. Swan Global Wealth works with private clients to provide valuable market insights, yet most individuals did not know that tax-loss harvesting was an option,” he said.Lubka further pointed out that tax-loss harvesting is beneficial because there is currently no “wash sale rule” applied to crypto, which would prevent the tax break if an investor bought that same asset 30 calendar days before or after the sale.
Donating to charity is another way for crypto investors to reduce their taxable income, which can be a. Alex Wilson, co-founder of The Giving Block — a crypto donation platform — told Cointelegraph that donating cryptocurrency is tax efficient because it allows investors to avoid capital gains tax. He said:
“If an investor bought Bitcoin at $1 and sold it at current market prices, that would normally be taxed. But if you donate the Bitcoin to a nonprofit, it becomes tax deductible. These deductions are even higher when donated to a 501 charity.” Wilson shared that The Giving Block has seen an increasing number of crypto donations over the past year, especially as investors become more aware of the benefits. “I expect this year to be big for donations because crypto is already on the rise,” he said, adding that nonfungible token philanthropy
. “The Giving Block has seen almost 30% of its donations coming from NFTs.” According to Wilson, NFT donations function the same as crypto donations.
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