How to report losses from tokens that went to 0?

Tax Questions
#1

Hi there, I own some tokens that have become literally valueless and can no longer be traded on exchanges. How can I report my losses on these cryptos when I can no longer trade them (and trigger a taxable event in doing so)?

#2

Hey @Alvo

Thanks for your message. :+1:t2:

You have a couple of options here, you’re likely looking for Solution B, see below. :point_down:

Note: Not all countries allow you to write off failed investments as losses - it depends on the guidelines published by your tax office.

:green_circle: Solution A: If you just want to remove this asset from your holdings, without realizing losses:

  • Send the token to a burner address or create a manual withdrawal in Koinly
  • Tag the withdrawal as Lost

:green_circle: Solution B: If you want to realize losses on this asset equal to the cost of acquisition of this asset:

  • Send the token to a burner address or create a manual withdrawal in Koinly
  • Edit the worth of the withdrawal and set it to $0
  • Do not add any tags

https://support.koinly.io/hc/en-us/articles/9914594792092-How-to-add-transactions-manually

I hope that helps. :blush: