Are short term capital losses on digital currencies eligible for deduction against ordinary income?

3 answers

• Sims MeadowsJun 08, 2021 · 5 years ago
  Yes, you can deduct short term capital losses on digital currencies from your ordinary income. According to the IRS, if you sell or exchange digital currencies at a loss, you can use that loss to offset any other capital gains you may have, as well as up to $3,000 of ordinary income. This can help reduce your overall tax liability. However, it's important to keep accurate records of your transactions and consult with a tax professional to ensure you are following the proper guidelines.
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• BingusAug 09, 2023 · 3 years ago
  Absolutely! Short term capital losses on digital currencies can be deducted against your ordinary income. This means that if you have losses from selling or exchanging digital currencies within a year, you can use those losses to reduce the amount of taxable income you have from other sources. It's a great way to minimize your tax burden and potentially get a refund. Just make sure to keep track of all your transactions and consult with a tax advisor for specific guidance based on your situation.
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• Nikki YuOct 15, 2023 · 2 years ago
  Yes, short term capital losses on digital currencies are eligible for deduction against ordinary income. This means that if you have losses from selling or trading digital currencies within a year, you can use those losses to offset your ordinary income. It's a valuable tax strategy that can help lower your overall tax bill. However, it's important to note that the rules and regulations surrounding digital currencies and taxes can be complex, so it's always a good idea to consult with a tax professional to ensure you are taking advantage of all available deductions and credits.
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