Cryptos

Crypto assets lost in hacking incidents can be claimed as tax loss: Experts. – Entmetrics

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Digital assets lost in hacking incidents or exploits can potentially be claimed as a tax loss, experts say, but you have to live in the “right country”. Experts are looking into the matter as more than 8,000 Solana wallets have been compromised and an estimated $8 million worth of crypto has been stolen due to a security breach in Slope’s network. a loss for tax purposes in certain jurisdictions. He pointed out that the initial amount an investor paid for the assets can be used to offset other capital gains. Australia has such provisions and this is where CryptoTaxCalculator is headquartered. Brunette said many countries have a provision allowing these types of tax deductions. He thinks investors should work closely with their local tax professionals and make sure they keep adequate proof of the loss. Danny Talwar, tax manager at Koinly, added that investors in Australia must prove that the lost crypto was under their control at the time it was stolen. He said investors had to prove to the Australian tax authorities that the asset had been stolen and was under their control. Talwar stressed that it is essential that the tax authorities have enough evidence that the crypto is unrecoverable. This sheds light on blockchain mining tools like Etherscan and Solscan to legitimize evidence on the hacker’s destination address. These tools provide evidence of a large pool of hacked funds. In Australia, evidence of a hack must also contain dates indicating when the private keys were acquired or lost, along with the associated wallet addresses. For US-based crypto investors, declaring hacked crypto assets as a tax loss is no longer applicable due to the 2017 tax reform. Investors in the UK and Canada also have a somewhat complicated task. . Claims for tax losses can be made if investors are willing to follow certain unique steps set by the tax office of the respective country.

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