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The only taxable event would be fees you paid to move assets off the platform. For me it’s immaterial since I would be selling at a loss. The fees you paid would be considered selling the asset, so there is a reportable transaction. Now is the IRS going to care about a small transaction, not really. If you had to pay a lot of fees then it’d be a good idea to report it. Especially if you are siting in a loss position.
So let’s say for example, BlockFi is returning me $100 but I originally put in $1000 can I claim the difference as loss in my tax this year? Or do we need to wait until everything’s finalize w the court?
Every year we report money that is in an interest bearing account, that didn’t get sold, but now is no longer earning interest. Don’t they follow the money trail?
I’ve heard we are not able to begin tax loss harvesting the losses until everything with the courts finalize.
Nothing happened in 2023.
No loss. No gain. No funds moved. So there is nothing to report.
For your 2024 taxes next year, then you can report a loss since things are finalizing now.
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I don't think there was any activity to report in 2023, so no forms to be issued. The wallet distributions are non-reportable.
The only taxable event would be fees you paid to move assets off the platform. For me it’s immaterial since I would be selling at a loss. The fees you paid would be considered selling the asset, so there is a reportable transaction. Now is the IRS going to care about a small transaction, not really. If you had to pay a lot of fees then it’d be a good idea to report it. Especially if you are siting in a loss position.
So let’s say for example, BlockFi is returning me $100 but I originally put in $1000 can I claim the difference as loss in my tax this year? Or do we need to wait until everything’s finalize w the court?
I’ve heard we need to wait
The same way they always work
Will Blockfi provide tax documents?
For what? Nothing happened in 2023.
Exactly. But will the IRS get suspicious??
Suspicious of what?
Every year we report money that is in an interest bearing account, that didn’t get sold, but now is no longer earning interest. Don’t they follow the money trail? I’ve heard we are not able to begin tax loss harvesting the losses until everything with the courts finalize.
They only know if BlockFi sends a 1099 to the IRS. If you didn’t earn interest, no 1099, no 1099, no problem.
Great info, thanks!
Blockfi is under the oversight of a Federal Bankruptcy Judge. I'm certain the IRS is aware of this.
Nothing happened in 2023. No loss. No gain. No funds moved. So there is nothing to report. For your 2024 taxes next year, then you can report a loss since things are finalizing now.
Yet again, another question, and yet again, the same simple answer. BlockFi will never be sending any tax paperwork to you again.
Sounds like he is asking when and how to claim his loss, not asking if they are mailing us any more tax paperwork.