The year 2022 is coming to an end and many investors may find themselves in losses. In this context, Waltio has developed a tool aimed at people who have sold cryptocurrencies, to enable them to reduce or even cancel their possible taxation.
Waltio’s new solution to reduce its taxation
Every year no one escapes the tax return, and taking into account your cryptocurrency income is not always easy. To do this, Waltio has developed a tool to facilitate the calculation of its taxation.
But the bear market having marked the year 2022, many portfolios are currently in losses. The problem is that French law calculates the tax from the moment the disposal of assets has been completed.
This means that a person who sold at a profit at the start of the year, but was in a loss on December 31, 2022, will still have to pay the flat taxbecause it had realized a gain on its taxable disposal.
It is in view of this observation that Waltio has enriched its tool to enable it to propose a strategy aimed at optimizing its taxation:
Overview of Waltio’s imposition optimization tool
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💡 The tool that simplifies the declaration of your cryptocurrencies
Costed practical case
Tax optimization is all the more important this year given the market contextas Pierre Morizot, CEO of Waltio, pointed out:
“For many cryptocurrency owners, this is the first year of the bear market. Some have even experienced the disappearance or blocking of their funds on certain trading platforms such as FTX. With this feature, we want to enable crypto-asset owners to reduce their losses. We wanted to make this functionality accessible to as many people as possible, including within our free offer. »
Indeed, let’s go back to the example of this person who made a sale in capital gains at the beginning of the year and now in losses. Let us apply for this a numerical demonstration proposed by Waltio, with an initial investment of 6,000 euros.
If, for example, a taxable sale of 2,500 euros was made in March 2022 when the portfolio was valued at 10,000 euros, this represents the equivalent of 300 euros of taxes to be paid.
Indeed, in this case, it is necessary to calculate the share of profits present in the 2,500 withdrawn. The initial 6,000 euros constitute 60% of the new valuation of the portfolio at the time of the sale, which means that in the 2,500 euros, there are 1,000 euros in profit. Taxes providing for a flat tax of 30% on profits, this represents a good 300 euros.
To legally avoid being taxed when you are in losses, it is possible to make an assignment in euros to reinvest them immediately after, to generate a tax loss.
If we consider that today this person’s portfolio is valued at 3,000 euros because of the fall in the market, a loss sale of 2,000 euros of cryptocurrencies, which will be redeemed behind, will cancel the capital gain of 1000 euros realized earlier in the year.
It is therefore an interesting strategy to take into account, which everyone can focus on according to their assets in order to reduce their tax burden after a year of bear market.
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Source: Waltio
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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