Use This Loophole to Save on Your Capital Gains Taxes If you’re a seasoned investor, you know that one of the biggest downsides to any successful investment is the capital gains tax. The more money you make on your investment, the more money the government will claim! Fortunately, there’s a way to reduce your capital gains tax if you’ve invested in cryptocurrency — and it’s so good that CNBC is calling it a “tax loophole.” The loophole is pretty simple. Unlike stocks and mutual funds, cryptocurrency is considered property by the IRS. That means it’s exempt from the buying and selling restrictions that keep stock and mutual fund investors from saving on capital gains tax, like wash sale rules. What is a wash sale? If you sell or trade stocks at a loss and they are either “buy substantially identical securities,” “acquire substantially identical securities in a fully taxable trade,” or “acquire a contract or option to buy substantially identical securities” within 30 days, then the transaction is considered a wash sale and you can’t deduct those losses from your taxes. But with cryptocurrency, you don’t have to abide by these rules! That opens up the opportunity for substantial tax-loss harvesting that will majorly reduce the capital gains tax you owe. How do I practice tax loss harvesting? To harvest your cryptocurrency losses, you should sell your coins at a loss when the market dips and buy them back at a lower price. That loss will count against your future gains, and you can deduct it from your capital gains tax! You can do this as often as you want throughout the year because wash rules don’t apply. To really leverage the loophole, try to harvest your losses when the crypto market dips the lowest. How long will this loophole last? This loophole in the tax code is making headlines, and that isn’t good — the IRS will probably close it soon! With that in mind, start using this method as soon as possible to reduce your tax burden. Just make sure you keep detailed records of every transaction so that if the rules change, you can prove you were complying with the law. GOT CRYPTO?
3 GOALS EVERY ENTREPRENEUR NEEDS IN 2022 By now, you should have an idea of what you want your business to achieve in 2022, but have you considered how you will grow during that year — and the impact that could have on your business? Often, entrepreneurs and business leaders take on the identity of their companies, but in order to personally thrive and see their companies take off, they have to grow right alongside it.
To do so, consider these goals all entrepreneurs must focus on at some point in their careers.
Goal No. 1: Get a Life
You are more than the company you started. Plus, having hobbies or personal interests outside of your work can help you excel in work. It allows your brain to grow in new ways, sparking fresh ideas and perspectives. Consider activities that you’re interested in learning more about — like painting, podcasting, reading, or running — and get started. Maybe you’ll fail, but just keep trying! You may find a new activity that brings you the joy you need.
Goal No. 2: Save More
Many of the dimes you earn as a business owner go back into the company, but don’t forget to consider your future. Is your retirement plan in order? Do you have a plan should your company need to close? Will your family be secure? Consider these questions and hire a trusted financial advisor who can help you find personal investment success.
Goal No. 3: Meet New People
To learn more about tax loss harvesting, check out the article “Can Tax Loss Harvesting Improve Your Investing Returns?” on Forbes.com.
Becoming inundated by daily, menial tasks can make us miss opportunities. This is where meeting new people can be so valuable! By doing so, you create a network of people who have different experiences than your own. They can help you see beyond your biases and discover a new path. Who knows? You just might find the next great venture for your company!
Note: This information was provided to Randy by his financial advisor, Noah Greenbaum of Canal Capital. Before making any major investing decisions, we recommend consulting your own advisor or contacting Noah at Noah@Canal- Cap.com or 804-325-1450.
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