Tax advisor and cryptocurrency expert Nico Boy from Steuerberaten.de gives nine tips on how to treat profits and losses for tax purposes so that you can be on the safe side with your next tax return.
More and more individuals and companies are considering the possibility of investing in cryptocurrencies
The wallet is set up quickly, the first trades are made, profits and losses are made. What many traders do not concern themselves with, however, is the tax consideration of profits and losses from crypto trading. Many traders feel confronted with many questions at the latest when preparing their tax return. Therefore, here are nine tax tips for crypto investors (and miners).
Surprising for many newcomers to the crypto space: Although the name crypto currency suggests something else, crypto currencies are not currencies in the actual sense – but digital means of payment. In 2009, Bitcoin Bank was the first crypto currency to be publicly traded. As of today, there are thousands of different cryptocurrencies – but only around 1,000 of them achieve a daily trading turnover of more than USD 10,000. In contrast to other currencies, cryptocurrencies are not issued or regulated by the state. Virtual currencies are legally neither (foreign) currencies nor investments. They are traded as other assets, which means that profits and losses can be relevant for the tax return.
Tax tip 1: one year period
If you have owned crypto coins for more than a year, the sale is generally tax-free. In addition, you are not required to state the income in your tax return. When calculating the annual period, please note the following: The speculation period begins on the day following the purchase and ends on the day of sale.