• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

RJS LAW - Tax and Estate Planning

RJS LAW: San Diego Tax Attorney | IRS | FTB | CPA | California

Header Right

SOUTHERN CALIFORNIA’S FINEST
LAW FIRM

COMPLIMENTARY CASE EVALUATION

SAN DIEGO
(619) 595-1655
El CAJON
(619) 777-7700
  • Home
  • About
    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
    • Devon J. Arabo, ESQ., LL.M.
    • Brian M. Malloy, Esq.
    • Andrea Cisneros Valdez, Esq., LL.M.
    • Sam Imandoust, ESQ., LL.M
    • Lauren Suarez, ESQ., LL.M.
    • John I. Forry, Esq.
    • Martin Schainbaum, ESQ., LL.M.
    • Kaveh Imandoust, JD, MBT, CPA
    • Joseph Cole, ESQ., LL.M.
    • Christopher Engelmann, ESQ., LL.M.
    • Remy Hogan, Esq., LL.M.
    • Steve S. Mattia, Esq.
    • Dod Ghassemkhani, ESQ.
    • Vincent Renda, Esq.
    • Pedro Bernal, Esq.
    • Sabri P. Shamoun 1938-2023
    • Melanie M. Shamoun
    • Renae Arabo
    • Hilary Dargavell
    • Sandie Portilla
    • Lupita C. Torres
    • Jewell Cornejo
    • Kesia Belford
    • Danielle N. Misleh
    • Judith G. Jeremie, JD
    • Rebecca Shuman
    • Michael Lutzky, CPA
    • Gianna Iskander
  • Practices
    • Tax
      • IRS TAX MATTERS
        • IRS Appeals
          • IRS Appeals Process
          • Contesting an IRS Levy
          • Why Retain RJS LAW for IRS Appeals
          • 4 Tips For Navigating The IRS Rapid Appeals Process
        • IRS AUDITS
          • IRS Correspondence Audits
          • What are IRS Field Audits?
          • Initial IRS Compliance Center Audits
          • IRS Office Audits
          • What happens in an IRS Audit?
          • Taxpayer Rights Under IRS Publication 1
          • IRS Warns Taxpayers About Scam
        • NOTICES
          • IRS Notices
          • IRS Letters
          • FTB Notices
          • Avisos en Español
        • IRS Collections
          • Avoiding and Eliminating IRS Tax Liens
          • Collection Due Process Hearing
          • CP 501 – IRS Notice
          • Failure to file a tax return: What happens?
          • How the IRS calculates interest
          • How to get a tax levy released
          • ACS – Automated Collection System
          • IRS Collections Process
          • IRS Interest Abatement
          • IRS Revenue Officers
          • Jeopardy Assessments and Jeopardy Levies
          • National Tax Agencies
          • RJS LAW Approach to Collections
          • IRS Statute of Limitations on Collections
          • Streamlined Installment Agreements
          • Tax Penalty Abatement
          • Taxpayer Assistance Orders TAO
        • IRS Payroll Tax
          • Independent Contractor Reclassification Audits
          • IRS Forms 940 and 941
          • IRS Trust Fund Interviews
          • Payroll Tax Liability Payment Options
          • Trust Fund Recovery Penalties
        • IRS Wealth Squad
        • Offer in Compromise & Tax Settlements
          • OVERVIEW OF OFFER IN COMPROMISE PROCESS
          • The Offer in Compromise Process
          • Appealing an Offer in Compromise to the IRS
          • How does the IRS evaluate an Offer in Compromise
          • Offer in Compromise and Dissipated Assets
          • Offer in Compromise Requirements
          • Pros and Cons of an Offer in Compromise
          • Why Choose RJS LAW?
          • Offer in Compromise Alternatives
          • Actual IRS Offer in Compromise Results
      • STATE TAX MATTERS
        • EDD California Payroll Tax Lawyer
          • EDD Investigations
          • EDD Collections – Liens, Levies, and Garnishments
        • CDTFA – California Sales Tax
          • California Sales Tax Appeals
          • California Sales Tax Audits
          • California Department Of Tax And Fee Administration – CDTFA
        • California State Tax Matters – California Franchise Tax Board | FTB | EDD
          • California Residency Audits
          • Discharging State Income Taxes in Bankruptcy
          • State Tax Practice – Outside of California
      • CRIMINAL TAX ISSUES
        • Criminal Investigation Division
        • IRS Criminal Investigation Division Tactics
        • Criminal Tax Defense – Tax Crimes
        • Currency Transaction Records & Suspicious Activity Reports
        • IRS Methods of Proof: Tax Fraud and Evasion
        • Methods IRS Agents Use to Locate Assets
        • IRS Special Agent Visits
        • Are You a Criminal Investigation Target?
        • Criminal Tax Attorney vs. White Collar Defense
      • CORPORATE TAXES
      • TAX COURT LITIGATION
      • Innocent Spouse Relief
    • International Tax
    • Visa Gold Card
    • Estate Planning
    • Trust Litigation
    • Trust, Estate & Probate Litigation
    • Trust & Estate Administration
    • Probate
    • Bankruptcy
      • Bankruptcy (FAQ’s)
    • Civil Litigation
    • Criminal Defense
    • Accidents & Injury
    • Corporate & Transactional
    • Private Wealth Services
    • Real Estate Law
      • Landlord Tenant Law
    • Employment Law
  • Tax Institute
    • 10th Annual USD School of Law – RJS LAW Tax Institute
    • 9th Annual USD School of Law – RJS LAW Tax Institute
    • 8th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 28th, 2023
    • 7th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 15th 2022
    • 6th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 5th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 4th Annual USD School of Law – RJS LAW Tax Controversy Institute
  • Testimonials
  • Giving
    • Giving
    • RJS LAW Donates Billboard to the Girl Scouts
  • Awards
    • Awards
    • Ronson J. Shamoun at events with various dignitaries
    • SD50 Extraordinary Leadership
    • Media
    • Video Gallery
  • Blog
  • Pay
  • Contact
  • en English
    • en English
    • es Español

WINNER OF THE UNION TRIBUNE SAN DIEGO'S BEST TAX LAW FIRM

 


9 YEARS

Call
Contact
Blog
  • Home
  • About
    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
    • Devon J. Arabo, ESQ., LL.M.
    • Brian M. Malloy, Esq.
    • Andrea Cisneros Valdez, Esq., LL.M.
    • Sam Imandoust, ESQ., LL.M
    • Lauren Suarez, ESQ., LL.M.
    • John I. Forry, Esq.
    • Martin Schainbaum, ESQ., LL.M.
    • Kaveh Imandoust, JD, MBT, CPA
    • Joseph Cole, ESQ., LL.M.
    • Christopher Engelmann, ESQ., LL.M.
    • Remy Hogan, Esq., LL.M.
    • Steve S. Mattia, Esq.
    • Dod Ghassemkhani, ESQ.
    • Vincent Renda, Esq.
    • Pedro Bernal, Esq.
    • Sabri P. Shamoun 1938-2023
    • Melanie M. Shamoun
    • Renae Arabo
    • Hilary Dargavell
    • Sandie Portilla
    • Lupita C. Torres
    • Jewell Cornejo
    • Kesia Belford
    • Danielle N. Misleh
    • Judith G. Jeremie, JD
    • Rebecca Shuman
    • Michael Lutzky, CPA
    • Gianna Iskander
  • Practices
    • Tax
      • IRS TAX MATTERS
        • IRS Appeals
          • IRS Appeals Process
          • Contesting an IRS Levy
          • Why Retain RJS LAW for IRS Appeals
          • 4 Tips For Navigating The IRS Rapid Appeals Process
        • IRS AUDITS
          • IRS Correspondence Audits
          • What are IRS Field Audits?
          • Initial IRS Compliance Center Audits
          • IRS Office Audits
          • What happens in an IRS Audit?
          • Taxpayer Rights Under IRS Publication 1
          • IRS Warns Taxpayers About Scam
        • NOTICES
          • IRS Notices
          • IRS Letters
          • FTB Notices
          • Avisos en Español
        • IRS Collections
          • Avoiding and Eliminating IRS Tax Liens
          • Collection Due Process Hearing
          • CP 501 – IRS Notice
          • Failure to file a tax return: What happens?
          • How the IRS calculates interest
          • How to get a tax levy released
          • ACS – Automated Collection System
          • IRS Collections Process
          • IRS Interest Abatement
          • IRS Revenue Officers
          • Jeopardy Assessments and Jeopardy Levies
          • National Tax Agencies
          • RJS LAW Approach to Collections
          • IRS Statute of Limitations on Collections
          • Streamlined Installment Agreements
          • Tax Penalty Abatement
          • Taxpayer Assistance Orders TAO
        • IRS Payroll Tax
          • Independent Contractor Reclassification Audits
          • IRS Forms 940 and 941
          • IRS Trust Fund Interviews
          • Payroll Tax Liability Payment Options
          • Trust Fund Recovery Penalties
        • IRS Wealth Squad
        • Offer in Compromise & Tax Settlements
          • OVERVIEW OF OFFER IN COMPROMISE PROCESS
          • The Offer in Compromise Process
          • Appealing an Offer in Compromise to the IRS
          • How does the IRS evaluate an Offer in Compromise
          • Offer in Compromise and Dissipated Assets
          • Offer in Compromise Requirements
          • Pros and Cons of an Offer in Compromise
          • Why Choose RJS LAW?
          • Offer in Compromise Alternatives
          • Actual IRS Offer in Compromise Results
      • STATE TAX MATTERS
        • EDD California Payroll Tax Lawyer
          • EDD Investigations
          • EDD Collections – Liens, Levies, and Garnishments
        • CDTFA – California Sales Tax
          • California Sales Tax Appeals
          • California Sales Tax Audits
          • California Department Of Tax And Fee Administration – CDTFA
        • California State Tax Matters – California Franchise Tax Board | FTB | EDD
          • California Residency Audits
          • Discharging State Income Taxes in Bankruptcy
          • State Tax Practice – Outside of California
      • CRIMINAL TAX ISSUES
        • Criminal Investigation Division
        • IRS Criminal Investigation Division Tactics
        • Criminal Tax Defense – Tax Crimes
        • Currency Transaction Records & Suspicious Activity Reports
        • IRS Methods of Proof: Tax Fraud and Evasion
        • Methods IRS Agents Use to Locate Assets
        • IRS Special Agent Visits
        • Are You a Criminal Investigation Target?
        • Criminal Tax Attorney vs. White Collar Defense
      • CORPORATE TAXES
      • TAX COURT LITIGATION
      • Innocent Spouse Relief
    • International Tax
    • Visa Gold Card
    • Estate Planning
    • Trust Litigation
    • Trust, Estate & Probate Litigation
    • Trust & Estate Administration
    • Probate
    • Bankruptcy
      • Bankruptcy (FAQ’s)
    • Civil Litigation
    • Criminal Defense
    • Accidents & Injury
    • Corporate & Transactional
    • Private Wealth Services
    • Real Estate Law
      • Landlord Tenant Law
    • Employment Law
  • Tax Institute
    • 10th Annual USD School of Law – RJS LAW Tax Institute
    • 9th Annual USD School of Law – RJS LAW Tax Institute
    • 8th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 28th, 2023
    • 7th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 15th 2022
    • 6th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 5th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 4th Annual USD School of Law – RJS LAW Tax Controversy Institute
  • Testimonials
  • Giving
    • Giving
    • RJS LAW Donates Billboard to the Girl Scouts
  • Awards
    • Awards
    • Ronson J. Shamoun at events with various dignitaries
    • SD50 Extraordinary Leadership
    • Media
    • Video Gallery
  • Blog
  • Pay
  • Contact

Leave a Comment

Can You Write Off Crypto Losses on Taxes?

Can You Write Off Crypto Losses on Taxes

Crypto Losses on Taxes

The cryptocurrency and NFT (non-fungible token) booms pushed markets to dizzying highs and devastating lows. What was once seen as a stellar investment now appears to be on the decline, and some people are considering getting out of the crypto market entirely. Selling at a loss, however, is an unpleasant prospect. As such, crypto investors may find themselves wondering if they can write off crypto losses on taxes. The answer, luckily, is yes. Losses on cryptocurrency and NFTs can be written off either to offset capital gains or deduct up to $3,000 from one’s yearly income tax.

When Can You Write Off Losses?
At present, the IRS treats cryptocurrency and NFT, collectively referred to as “crypto,” as property, the same as any other stock. As such, the value of a cryptocurrency is only realized—and therefore only taxable—after the crypto is sold, traded, or spent. To write off crypto losses on taxes, a particular coin or NFT must be sold, traded, or spent at a loss. Merely holding crypto that has decreased in value does not allow for tax write offs. Nor does selling the currency at a loss and buying it back: this tactic is considered a ‘wash sale’ by the IRS and unfavorably looked upon. For additional information on cryptocurrency and NFTs, visit the RJS LAW Blog.

How Do You Write off Crypto Losses on Taxes?
After realizing a loss on a particular crypto asset by selling, trading, or purchasing something with the crypto, you will list that transaction on your taxes using Form 8949 Sales and Other Dispositions of Capital Assets and Form 1040, Schedule D. If the currency was mined or minted, this should be disclosed either on Schedule C (for businesses) or Schedule 1 (for hobbyists).

These forms will all require you to list the basis, or initial price, of your crypto. A typical transaction for an NFT may look something like this:

  1. Use United States Dollars (USD) to buy 1 Ethereum (ETH) at $1,500 plus a $5 transaction fee,
  2. Buy an NFT for 1 ETH immediately,
  3. At some point later, sell the NFT for .5 ETH
  4. Convert the .5 ETH back to USD. ETH is now trading at $1000.

The bases to be accounted for are the initial price of the ETH, the initial price of the NFT, and the price of ETH when the NFT was sold. Each transaction is considered a taxable event, so any loss of value may therefore be written off. Assuming the ETH transactions took place directly before and after the sale of the NFT, it is likely that the purchase of the NFT and the final conversion of ETH to USD will be considered capital gains (because an asset was sold or exchanged for profit) and the sale of the NFT will be considered a loss.

Once you have calculated your basis, you can determine if you are able to claim crypto losses on taxes. If you still made some profits, as in the scenario above, you could use the loss to offset capital gains. You may also use losses in crypto to offset other capital gains. If your general capital losses outstripped your gains, you may use the losses to write off up to $3,000 per year of personal income. If your losses are greater than $3,000, the amount may be carried over and applied to subsequent tax years.

Conclusion
Taking losses on an investment is never fun. Luckily losses in crypto, like those in other investments, may be written off. If you have questions on how to write off crypto losses on taxes, RJS Law provides Tax Planning services which can help individuals and businesses navigate the complexities of both the Internal Revenue Code and local tax laws.  Contact RJS LAW online or at 619-595-1655 to arrange a free consultation.

Written by Zachary K. McDaniel

About Us

Filed Under: Cryptocurrency, Cryptocurrency Taxes, Digital Assets Tagged With: CryptoCurrency, Cryptocurrency Taxes, Digital Assets

RJS LAW

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Subscribe To RJS LAW

Email Address

Contact Us

  • This field is for validation purposes and should be left unchanged.

Recent Posts

  • Common EDD Audit Triggers and How to Prepare Your Business
  • Beyond the Basics: Advanced Strategies for Managing Your California UI Rate and Minimizing Costs
  • Key California EDD Legislative Updates and Potential Business Implications

Categories

  • Advance Child Tax Credit
  • Asset Protection
  • Bank Fraud
  • Bankruptcy
  • Bankruptcy Attorney
  • Bankruptcy Laws
  • Beneficial Ownership Information
  • Bypass Trust
  • California AB5
  • California Payroll Taxes
  • California Sales Tax
  • Cannabis Tax
  • CARES Act
  • Cash Payments
  • Charitable Trust
  • Child Tax Credit
  • Company News
  • Contractor vs Employee
  • Contracts
  • Coronavirus
  • Court Settlements
  • COVID-19
  • CP14 Notice
  • CP504
  • CP504B
  • Cryptocurrency
  • Cryptocurrency Taxes
  • Digital Assets
  • E-Commerce
  • Economic Stimulus
  • EDD
  • EDD Audit
  • EDD Audit Penalties
  • Employee Retention Credit
  • Employment Law
  • ERTC
  • Estate Planning
  • Estate Planning Litigation
  • Excise Taxes
  • Exemption Planning
  • FBAR
  • FBAR Penalties
  • FBAR Reporting
  • Filing Bankruptcy
  • Financial Reporting
  • FinCEN
  • Foreign Bank Account
  • Foreign Bank Accounts
  • Form 105
  • Form 5471
  • Form 8300
  • FTB Audits
  • FTB Collections
  • FTB Issues
  • FTB Penalties
  • Gambling Tax
  • Gaming Losses
  • Gereration Skipping Trusts
  • Gold Card Visa
  • Guardianship
  • Hiring a tax attorney
  • Homestead Exemption
  • How to Declare the Child Tax Credit
  • How-To Legal Advice
  • Inflation Reduction Act of 2022
  • Intellectual Property
  • International Tax
  • International Tax Attorney
  • International Tax Law for Non-Profits
  • International Tax Reporting Requirements
  • IRS
  • IRS Appeals
  • IRS Audits
  • IRS Collections
  • IRS CP14 Notice
  • IRS Deadlines
  • IRS Form 8833
  • IRS Forms Explained
  • IRS Issues
  • IRS News
  • IRS Notice of Tax Lien
  • IRS Notices
  • IRS OVDI
  • IRS Penalties
  • IRS Website
  • Jobs Act
  • Levies
  • Liens
  • Lottery Taxes
  • Mail Fraud
  • Masters in Taxation – LL.M.
  • No Worries ®
  • Offer in Compromise
  • Opportunity Zone
  • Penalties for Filing Late
  • PPP Loan
  • Probate
  • Property Tax Assessment
  • Proposition 19
  • Publicly Traded Partnership
  • Required Minimum Distribution
  • Restaurant Sales Tax
  • Retaliation Claims
  • Retirement
  • Revocable Trust
  • Rewards Program
  • RJS LAW In The Community
  • Sales Tax
  • Sales Tax Audit
  • San Diego Law Firm
  • SBOE Audits
  • SBOE Issues
  • Self Employment
  • Small Business
  • Stock Buyback
  • Stock Options
  • Stock Repurchase
  • Streamlined Procedures
  • Student Loans
  • Tax and Vice
  • Tax Attorney
  • Tax Brackets
  • Tax Controversy Institute
  • Tax Credit
  • Tax Cuts
  • Tax Deduction
  • Tax Deductions
  • Tax Delinquency List
  • Tax Gap
  • Tax Institute
  • Tax Law
  • Tax Liens
  • Tax on Social Media Influencers
  • Tax Penalties
  • Tax Planning
  • Tax Rates
  • Tax Tips
  • Taxation of Rewards
  • Taxes
  • The American Rescue Plan Act of 2021
  • Third Party Settlement Organizations
  • Trust
  • Trust Litigation
  • Trusts
  • U.S. Supreme Court
  • Uncategorized
  • Unemployment
  • USD School of Law – RJS LAW Tax Controversy Institute
  • Vape Taxes
  • W-8 Forms
  • Wage Garnishment
  • Wills

Footer

Legal Resources

  • Payments
  • Services
  • Tax Law Blog
  • Video Gallery

SAN DIEGO

Map & Directions
FREE Underground parking in building

303 A Street
Suite 400
San Diego, CA 92101

Phone No.
(619) 595-1655

El CAJON

Map & Directions

900 N. Cuyamaca St., Suite 101
El Cajon, CA 92020

Phone No.
(619) 777-7700

RJS LAW Tax

Areas We Serve

– Del Mar
– Coronado
– La Jolla
– La Mesa
– Chula Vista
– Escondido
– San Marcos
– Carlsbad
– Oceanside

 


©2025 | RJS LAW Firm | All Rights Reserved | Privacy Policy