As You Finish Up Your Tax Return…

As you might recall, nearly two years ago I wrote that I was having a midlife crisis and dusting off my old Metallica CDs from high school.

Well, the crisis passed. I have since come to grips with being over the hill, even if I curse under my breath every morning from creaky knees and a sore back.

But I got an email this week from our editorial director Dave Dittman that made me laugh. (You might recall that Dave happened to go to the same high school as Metallica’s front man, James Hetfield.)

It was an article from the satire site The Onion with the headline: “Metallica Board Of Directors Debates Whether New Riff Will Have Negative Impact On Shareholder Value.”

This brings up the eternal question of whether art imitates life or life imitates art… or The Onion.

As I mentioned in my midlife crisis article, most of Metallica’s band members were typical ne’er-do-well rock stars with no interest in the actual workings of the business. But drummer Lars Ulrich was known to regularly show up to meetings with spreadsheets and a list of probing questions.

At any rate, I saw another headline this past week that I initially thought was in jest, or was originally published on The Onion, but turned out to be real news: “Americans lost $1.7 billion trading bitcoin in 2018 — and more than half don’t know they can claim a deduction.”

Maybe I’m just a little more ideological about tax avoidance, but I can’t imagine having a legitimate tax deduction available to me and not take taking advantage of it.

But then I got to thinking about it. The tax code is notoriously complicated and intimidating. There are probably quite a few deductions that readers aren’t properly utilizing.

So, today let’s go through a list.

Crypto losses

I’ll start with the subject of the last headline, cryptocurrencies. If you traded bitcoin or other cryptos last year, there is a good chance you lost money. And if so, you can write it off as a capital loss on Schedule D. You’ll need to make sure you kept good records. You’ll need your cost basis, the sale proceeds and the dates of sales and purchase.

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