Bitcoin investors could increase tax savings by selling and reacquiring their cryptographic assets

According to a recent article published by The Wall Street Journal (WSJ), investors should sell and repurchase their Bitcoin (BTC) in order to reduce the amount of fees paid. The WSJ suggests that one of the good things about the current bear market is that it offers tax cuts.

In the United States, the Internal Revenue Service (IRS) considers virtual currencies as an investment property. This is similar to stocks but different from a currency. Short-term profits and losses in the country are subject to taxes of up to 40.8%. Long-term gains and losses have a tax of 23.8%.

However, users can sell their virtual currencies and re-invest their funds in cryptocurrencies. Losses can also be used for reduce taxes on earnings. This means that if a US investor reinvests his funds once again in the crypt, they may have potentially larger tax reliefs.

According to Jim Calvin, a cryptic and cryptic analyst from Deloitte Tax, he explained that users can wait an hour or a day if they want to buy back their encrypted assets to be in the right side of the law.

Regulatory agencies are trying to figure out how to better adjust the market for virtual currencies. In general, crypto investors do not tend to report capital gains from crypto. In fact, only 0.04 percent of tax producers have informed their investments on IRS.

The United States is not the only country that is trying to impose better regulations on cryptographic space. Japan and Thailand are two other examples of countries trying to improve their control of the market.

Again in October, the Japanese government proposed to change the cryptocurrency tax storage system in order to improve accuracy and compliance.