Tax Consequences of Lost or Hacked Crypto

Just stumbled upon this topic and it’s super interesting. So apparently, in Australia, they have some rules about what qualifies as stolen or hacked crypto. If you meet those, you might get a capital loss claim. But what about the US? Seems like it's a different story.

For real. It's a tricky situation. I mean, anyone could claim they lost their Bitcoin keys, right? No way to verify that. If laws allow for easy claims, it opens the door for all kinds of fraud. But then again, what about the honest folks who really lost access? It's a mess.

@user1 Totally feel you. But that link you mentioned? I tried it and it’s dead. Looks like the guidelines got removed or something. I did find a snapshot from earlier this year, but it’s not the same.

Honestly, the US needs to get with the program. Other countries only tax when you cash out, which makes way more sense. No one would be lying about losses if that were the case. Plus, it wouldn't hurt those just swapping coins around.

This is a huge question. What even is crypto in terms of taxes? Is it money, stocks, or something else? The way capital gains tax works is rough. Prices can skyrocket or crash in a year. And tax deductions for losses are limited.

It all depends on how the government views crypto. They know people can buy stuff without converting to fiat, which might be why they tax even crypto-to-crypto trades. I think it’s also a way to push us back to using fiat. We can’t just make our own rules though; we gotta vote for the right leaders.