For investors whose first time investing in bitcoin was in 2018 or after late 2017, there is a high likelihood that they have incurred substantial losses for the fiscal year of 2018 if they haven’t sold yet. On December 17, 2017, bitcoin hit an all-time high at over $19,000. Thereafter, it has fallen over 80 percent and now hovers at around $4,000 at the time of writing. While losing money is never the end goal, there are certain measures investors can take in order to minimize their taxable income by utilizing their capital losses incurred from bitcoin during the current year and going forward.Before diving into what measures can be taken, it is first necessary to address how the regulatory bodies who set these precedences view bitcoin and similar assets. Although this piece is centered on the U.S. regulatory requirements applied to bitcoin, it is worth noting that many other countries have similar regulations internationally.Bitcoin Is PropertyAccording to the Internal Revenue Service (IRS), bitcoin is considered personal property. As such, any tax laws applicable to the sale of a house or car, or more similarly, a security, will also apply to the digital currency. Specifically, the IRS refers to taxes levied on the sale of an asset as capital gains tax, for which there are two types. Long-term capital gains tax applies to profits on assets held over a year, while short-term capital gains taxes apply ...
