In 2017, I purchased Ethereum and, after numerous trades, lost 80% of my holdings. A recent 10x surge restored my initial investment value. How does this loss impact the tax on minor gains?
hey, i think the loss may offset gains if each trade is looked at individually. its a bit murky though, so check with a tax pro to avoid any slip ups in your calculations
Based on my experience, the key is in treating each transaction as a separate event with proper documentation. If you can accurately separate the losses from the minor gains after your 10x surge, you might find that these losses can be used to reduce your taxable gain. It is crucial to keep detailed records for every trade made so that the tax authority can understand your calculations. In my case, thorough documentation helped clarify complex trade histories and provided a solid basis for tax offset claims.
hey ppl, i was just reading through and got really curious too. so if i got this right, even though you dirly lost 80% of your investment initially, those losses might come into play against the gains, right? but then that 10x comeback kinda resets the stage for a taxable event. im wonderin how the tax folks look at this—would they treat it as just separate trades and ignore the fact that one was a pretty huge loss? i mean, do you reckon that if you held on to that loss it could offset more than just that minor gain, or is it all pretty sliced up trade by trade? also, any one else had a similar situation and found a quirky tax rule that could help out? would love to hear how others reckon their multiphase trades shape up on paper. cheers!
hey, i was pondering over this thread and i think it’s super interesting how the tax guy might view these losses. it seems like theres a chance that the way you compute the cost basis can really swing things in your favor. i was reading somewhere that if you can show that the minor gains were really netted out by huge earlier losses, it might change the tax impact quite a bit. but the tricky part is getting those numbers lined up and making sure every trade is accounted for exactly as it happened… has anyone else’s experience lined up with using something like average cost basis or specific identification to clarify that? im genuinely curious how these details play out in the real world, especially when the trades are as varied as in crypto. do you reckon that better record keeping could actually tip the benefits more towards you in some cases? would love to hear some more insights or even any links if you wanna share some reading material. cheers!