Micah Fraim on a mission to help local Roanoke businesses truly flourish by helping them to take the stress out of tax time and show them how to harness to power of revolutionary accounting and marketing practices. I have worked with hundreds of entrepreneurs and have helped advise them all on how to attain the best results for their businesses.
Episode Highlights Here:
Micah
So if you’re someone who invested in Bitcoin in 2010, well, you’re so highly appreciated, you can’t do a whole lot. But if you’re like most people where we sort of follow last year’s hot trend, and we get involved, we’re really bad as to when we’re timing to enter a market.
Jessica
Today’s topic is using the crypto bear market for tax savings. There’s been all kinds of bankruptcies this year in the various cryptocurrency exchanges. And let’s talk about that. So, using the crypto bear market for tax savings, what are some of the ideas that you’re sharing with your clients? Well,
Micah
one of the biggest ones, and this is applicable that we’re at the end, it’s applicable for a few reasons. One, we’re at the end of the year, and the mark is absolutely in the toilet right now. So there’s a lot of potential given just how, how much it’s dropped. But we were talking a lot about tax loss harvesting, because cryptocurrency specifically, at least for now, is not subject to the wash sale rules. I’m going to be surprised if that survives the 2023 tax year, which is another reason this is applicable is that you might not be able to do this next year. But as it stands right now, you don’t have to wait the 30 or 31 days from the time you sell an asset to repurchase it to be able to realize that loss and the crypto market year to date, depending on whatever project you were involved in. You’ve got, you’re down 50 to 99%, depending on exactly what you’re investing in. So if you’re someone who invested in Bitcoin, and 2010, well, you’re so highly appreciated, you can’t do a whole lot. But if you’re like most people, we sort of followed last year’s hot trend and we get involved, we were really bad as to when we’re timing to enter a market. If you bought at the beginning of the year you bought at 21 or even some point in 2020 you’re very likely underwater on your investments right now. And if you bought 10 Bitcoin when they’re $60,000. Well, they’re only worth $20,000 A piece now. So you’ve got an unrealized loss of $400,000. You can sell that Bitcoin, buy it back the same day, but you’ll still realize that capital loss that you’re either either able to use against whatever capital gains you have, or just carry that forward and indefinitely, which again, since this strategy may not even exist next year, or at the very least, it will be the wash sale rules, you have to plan around them. That combined with just how bad the market is right now, taking advantage of some tax loss harvesting is just a really easy thing people can do for some pretty significant benefit.
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About Micah Fraim
Hi! I’m Micah and I am a CPA and cryptocurrency tax expert. Blockchain is an emerging market and moves at lightning speed. Because of this, very few people – including most CPAs – understand how it is taxed. But I LOVE crypto and am involved in it daily – both as an investor and an accountant. We can help you to understand how crypto is taxed. And more importantly, we’ll help you reduce the taxes you’ll pay on your income.
We focus on tax planning and preparation for cryptocurrency investors, online businesses, and other growth-centric businesses. If you have a dynamic and rapidly changing situation, that’s what we love and what we’re here for.
Rules for cryptocurrency and other digital assets are rapidly changing and confusing. And as such end up being a big source of stress for many investors. They do not understand the rules surrounding crypto taxation. And what they do learn may be outdated within a few months.
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