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Bitcoin (BTC), Cryptocurrency-While cryptography markets showed a slight recovery at the start of 2019, with Bitcoin holding over $ 4000 before making a small correction, investors – and their portfolios – are still experiencing the effects of the prolonged bear cycle of the 2018.
According to a new survey and data compiled by credit karma, Bitcoin investors in the United States who sold their stake last year saw a loss of $ 1.7 billion, plus 1% of the current total market capitalization of the coin. While it's no surprise that Bitcoin sellers have taken a dip in the declining market, with BTC down more than 80% since it's a record high of $ 19,700, the survey also found that Most investors are not going to report losses, a move that could come back to haunt them come tax season.
The survey, conducted by Qualtrics and published on Credit Karma, reports that Bitcoin's losses to the seller may have been baffling, but intentional negligence to report losses is even more surprising, especially given the reduction in taxes that investors could receive to do it,
"Based on a new Credit Karma survey, many investors do not plan to report their earnings or their bitcoin losses on their tax returns this season, which could be a costly mistake as US investors have seen about 1.7 billion dollars in bitcoin losses and 5.7 billion unrealized losses, based on the survey ".
The Credit Karma survey also reports that investors run the risk of being audited by the IRS if they fail to report or underestimate their earnings in Bitcoin, leading to even greater fines and penalties. However, the most salient message is for investors who have lost large Bitcoin sales in the downward market, reminding them that they can, to a small extent, alleviate their losses by requiring deductions of value.
The figure of $ 1.7 billion, which amounted to an average of $ 718 per seller, was only a small part of what the survey calculated for $ 5.7 billion of unrealized losses for investors who tried to overcome the storm not selling their BTC. While these investors hope to recover their losses in a possible market shift, or they could still feel the effects of FOMO in case of sudden price changes, they have also lost tax deductions for such an astonishing market crash.
In addition to the calculated borrowing of losses for US investors, the survey found that only 53% of American bitcoin investors intended to report their earnings or losses in this fiscal season, with another 19% undecided. Among the investors who sold at a loss, over a third do not intend to declare their losses, renounce any deductions or benefits they could receive from selling in a bear market.
The numbers are improving for US investors who made money with Bitcoin during the bear market, with 59 percent indicating they intend to return their earnings compared to 38 percent of investors who suffered losses.
More worrying both for the IRS and for the general scenario of investments for cryptocurrency, as many as 35% of the investors interviewed said that they "are not required to report the gains or losses of their investments in Bitcoin", still reporting problems in the form of an audit. Of the group that intends to renounce to mention the cryptocurrency on their tax forms, more than half said (again, in contradiction with the US tax codes) that they had not earned or lost enough money to justify the need to report.
Image courtesy of beatingbetting.co.uk
