Capital gains are gains from investments, not money made from your wage job(income). If you have a wage job where you have 50k income and you lose money on an investment you can deduct up to 3k from your income and only pay taxes on 47k of income. If you lose 10k (capital lose) on 1 investment and make 10k (capital gain) on another investment you can fully deduct the lose from the gain.
If you don't use your capital loses to deduct from this year's taxes it carries over and you can use it to offset future taxes.
thanks. i never thought i would learn something useful from LULZ
FYI this is why it's really important to actually report your capital losses to the IRS, the IRS doesn't give a shit if you don't report it because they'd rather you pay a bigger tax bill next year (unlike if you don't report gains which they will care about). It's up to you to report your losses for your own benefit.
here's an important tip to always remember. If you have any big taxable events (trading crypto for crypto, airdrops, earning, staking) during the year of a bear market crash, make sure that you tax loss harvest by the end of the year. Meaning you sell it or trade it to reset your cost basis (you can buy it back - called wash trading) to offset your previous capital gain with a capital loss.
example: trade bitcoin for alts and make 100k capital gain. Your alts drop 90% and now your altcoins are worth 15k but you owe 30k in taxes. There have been examples of people owing hundreds of thousands of dollars in taxes but their shitcoins crashed in value, once the new year starts on January 1st, it is too late and you cannot offset your capital gains because it's considered a different tax year. It is especially important to remember during any year where lots of profit is made followed by a crash.
With airdrops you need to actually think about when to claim them too. The income received from them will be taxed at the market price when you claim and sometimes you can claim comically early before they really pump. I claimed Looksrare when it was like $1 back when the nft market was much better and it went up to like $4. I sold when it was like $2.50. However if I claimed at $4 and didn't sell until today when it was $0.20 I'd be screwed for taxes.
pay up goyim
uhh check your math sir if I owe them money when I make money then they owe me money when I lose money
well, its actually fair because they only tax up to 3,000 dollars of gains, right?.........RIGHT?
Thats $3000 per year against your income but unlimited against your capital gains you fucking moron
i don't get it. give an example with numbers.
Capital gains are gains from investments, not money made from your wage job(income). If you have a wage job where you have 50k income and you lose money on an investment you can deduct up to 3k from your income and only pay taxes on 47k of income. If you lose 10k (capital lose) on 1 investment and make 10k (capital gain) on another investment you can fully deduct the lose from the gain.
If you don't use your capital loses to deduct from this year's taxes it carries over and you can use it to offset future taxes.
Well put. Thank you.
thanks. i never thought i would learn something useful from LULZ
I thought it was a 3% write off, not 3k.
No, it is 3k, not 3%.
FYI this is why it's really important to actually report your capital losses to the IRS, the IRS doesn't give a shit if you don't report it because they'd rather you pay a bigger tax bill next year (unlike if you don't report gains which they will care about). It's up to you to report your losses for your own benefit.
...now I'm trying to figure out where the fuck I got 3% from.
You get to write off the losses on future income *whose value has been steadily eroded away by inflation.
Please tell me I don't share LULZ with these retards when the board is basically dead. PLEASE.
We're 90% wagies and you know it.
lol you never knew this?
One of the core tenets of becoming/being rich is knowing your tax laws front and back. You already failed test #1. Back to the cagie.
here's an important tip to always remember. If you have any big taxable events (trading crypto for crypto, airdrops, earning, staking) during the year of a bear market crash, make sure that you tax loss harvest by the end of the year. Meaning you sell it or trade it to reset your cost basis (you can buy it back - called wash trading) to offset your previous capital gain with a capital loss.
example: trade bitcoin for alts and make 100k capital gain. Your alts drop 90% and now your altcoins are worth 15k but you owe 30k in taxes. There have been examples of people owing hundreds of thousands of dollars in taxes but their shitcoins crashed in value, once the new year starts on January 1st, it is too late and you cannot offset your capital gains because it's considered a different tax year. It is especially important to remember during any year where lots of profit is made followed by a crash.
With airdrops you need to actually think about when to claim them too. The income received from them will be taxed at the market price when you claim and sometimes you can claim comically early before they really pump. I claimed Looksrare when it was like $1 back when the nft market was much better and it went up to like $4. I sold when it was like $2.50. However if I claimed at $4 and didn't sell until today when it was $0.20 I'd be screwed for taxes.