Crypto Taxes – FAQs 2023

Gearing up for the 2023 US Tax Season? We've put together an FAQ list with answers to the top questions we've been receiving about crypto taxes - including FTX losses.

Crypto Taxes – FAQs

Is crypto taxable?

Yes, purchasing crypto with fiat or holding crypto is not taxable, but selling, trading or spending your crypto is taxable, as well as any income earned from the crypto such as staking. If you are a US taxpayer, you should report your crypto gains, losses and income in your yearly tax return.

I made money in crypto, do I have to pay crypto taxes?

Yes, every US taxpayer is required to pay taxes on any income or gains from the sale or exchange of cryptocurrency. While you may not receive a tax form from the exchanges, you should report all trades and income in your yearly tax return and pay any tax due by the applicable due dates.

I lost money, should I file crypto taxes?

Yes, it is important to report any gains and losses from cryptocurrency transactions on your tax return. Even if you lost money and owe no tax, you should file as you can use these losses to offset other gains in the current or future years.

I had funds in a bankrupt exchange, can I get tax relief?

If you managed to sell or trade the coins, you must report any gain or loss no different than any other gains or losses from trading. If you still own the coins but are currently unable to access them due the bankruptcy proceedings, such as the case of FTX, you are not currently allowed to write them off based on the current tax law.

Furthermore, FTX customers with funds on the exchange have not lost all the funds, as they are considered creditors in the bankruptcy case. It is expected that customers will recover some amount, however, the amount of the recovery after other creditors are paid remains unknown. For this reason, taxpayers have not realized a total loss yet and the amount of the loss will remain unknown until the bankruptcy proceedings are finalized, which could take over a year.

Please check out our Crypto Tax: The Definitive USA Guide 2023 for more information or put your questions below so we can review your specific case and get back to you asap.

Stay awesome,

Max from Accointing by Glassnode