Billions in bitcoin trapped on lending platforms like Celsius may turn into a tax write-off for investors
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Crypto lending platforms like Celsius, Anchor, and Voyager Digital have suspended or limited withdrawals. Many of these platforms have filed for bankruptcy, but it's not yet clear whether users will be able to recover some of their losses. CPAs say the U.S. tax code may provide some relief to these investors by way of an obscure deduction. CPA Lewis Taub stresses that there must be a complete loss of all that was lent to the platform in order for the debt to be considered deductible. For example, crypto coins and stocks, both of which are considered to be nondebt instruments, do not qualify for this write-off. For those affected by these platforms, reach out to a financial advisor to see whether their investment qualifies. Source