Credit Karma Tax, a free tax filing service that can be used to report gains or losses from trading cryptocurrency, has reportedly observed a massive rise in the amount of Credit Karma Tax filers, who reported short-term crypto losses in the first month of 2019 in comparison to the same period in 2018.
Launched back in 2016, Credit Karma Tax is a tool launched by San Francisco-based personal finance firm Credit Karma that aids cryptocurrency traders to report their gains or losses for Tax filling purposes. On April 3, the firm recently revealed that the number of Credit Karma Tax filers who reported short-term capital crypto losses in the first month of the 2019 filing season soared by 521%.
The Report
The comparative report of capital crypto gains and losses on federal taxes between Jan. 28 and Feb. 22, 2019, compared to those who filed their 2017 federal income taxes with Credit Karma Tax between Jan. 29 and Feb. 23, 2018.
Credit Karma explains that a short-term gain or loss is when an investor sells an asset that was held within one year, while a long-term gain or loss includes an asset that was held for more than one year.
Notably, in the same period, the crypto investors reporting long-term gains have increased by 35 percent year over year, with early Credit Karma Tax filers reporting an average gain of $15,352 during the first month of the 2019 filing season. As for average reported short-term crypto losses amounted to $3,405, i.e. a 322 percent increase in the average short-term loss from the first month of last year’s filing season.
In mid-January, Credit Karma released a survey showing that 53 percent of Americans planned to report their gains and losses for taxes from crypto, while 35 percent of respondents said that they sold their crypto at a loss and will not report on their tax returns.
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