If Bitcoin Price Drops — an Opportunity for Crypto Tax Planning

After many countries around the world such as the United States, the United Kingdom, France, and Portugal published their own cryptocurrency tax guidelines this year, it is only reasonable they will expect to see an increase in crypto tax filing. They may even follow suit with the U.S. Internal Revenue Service and begin their own crypto tax compliance campaign.

As the price of Bitcoin (BTC) jumped this year, so too did the tax liability for every profitable sale, trade or exchange for Bitcoin traders. The recent drop in Bitcoin price presents traders with a great opportunity to reduce tax liabilities accumulated since January 2019.

Many people don’t know it, but cryptocurrency tax liability can be significantly reduced by a recently developed practice called crypto tax planning.

Just like you can plan your taxes in stocks trading, countries that consider cryptocurrency to be an asset subject to capital gain tax also enable crypto traders to report capital losses, which means two…