BlockFi Interest Account tax write-off?

ryanhigs
ryanhigs Member Posts: 1 Newcomer
edited January 15 in Credits/Deductions

I had a significant amount of Bitcoin in a BlockFi interest account. I lost access to those assets on November 12th, 2022, and they filed for bankruptcy shortly after.

At some TBD time in 2024, I will receive a cash payment for a portion of the value of my BTC at the time they froze my assets. At what point can I get a tax write-off for those assets, and at what value (Bitcoin is currently worth more than 3X what it was worth on 11/12/22).

Tagged:
· Share on Twitter

Answers

  • rachels
    rachels FreeTaxUSA Agent Posts: 56

    Hi ryanhigs,

    If you will get a payment in 2024, you will typically report that income or loss on your 2024 tax return. In your FreeTaxUSA account, investment income/losses can be reported by going to Income > Common Income > Stocks or Investments Sold (1099-B).

    That can be entered as an investment "sale." Meaning, you would enter the amount you paid for the Bitcoin as the cost basis, then enter the amount you receive as payment in 2024 as the sales proceeds (assuming you will not be receiving any further payments for the Bitcoin). If the amount you receive is less than what you spent on the Bitcoin, you will see a capital loss listed on your tax return, Schedule D.

    · Share on Twitter

Categories