Before we dive in, it's important to note that this article is for informational purposes only and should not be taken as financial advice. The information provided here is meant to help you understand the options available for dealing with losses from a cryptocurrency exchange crash within CTC, but you should always consult with a financial advisor or tax professional before making any tax decisions.
With that in mind, let's explore what you can do if you find yourself dealing with losses from a crypto exchange crash (e.g. FTX, Cryptopia).
Scenario 1: You have all of your data
This scenario is the optimal one as we should be able to easily figure out what assets were lost when the exchange went under. The steps that you should follow are:
To start with we should import the data and make sure it's fully reconciled. For help with reconciling transactions have a look through the Review page.
Once all the data has been imported and reconciled you will need to navigate to the integrations page, where I will be able to click the drop-down box that shows the assets held in that exchange. For this example, I will be using FTX.
We know from the previous step that there was 2.51 ETH in FTX when they went down. We will use this information plus the date that the exchange went down to manually enter a transaction to show the loss, this will look similar to the below images:
This then assumes a 100% capital loss on the cost base of those assets, as can be seen in the below image:
Scenario 2: You don't have access to the data
Please reach out to support if you are in this situation and always consult a tax professional.
Disclaimer:
The information provided in this article is for informational purposes only and is not intended to provide tax advice or to substitute for the advice of a tax professional. The content of this article is designed to provide a how-to guide for using the app, and should not be relied upon as tax advice.
The reader is solely responsible for determining the applicability and suitability of the information contained in this article for their own particular circumstances. We strongly recommend that the reader conduct their own research and seek the advice of a qualified tax professional before making any decisions based on the information provided in this article.
By reading this article, the reader acknowledges that the author and publisher are not providing tax advice, and the reader agrees to release the author and publisher from any and all liability for any actions or decisions made based on the information contained in this article.