Total Loss Coins and Scam Coins

Is it possible to mark coins as a total loss if they were a scam or lost all liquidity?

Also, is it possible to manually enter values of coins that are not tracked and never will be?

Please read this article and let me know if you have anymore questions :slight_smile:

Thanks, but this doesn’t solve my issue. This is refers to ways to write off coins that have left my wallet as lost or stolen, but how do I write off coins that were rug pulls or honey pot scams? They are still in my wallet, but there is no liquidity to trade them out. They have no value.

You can set such tokens to ignore.

Ignoring doesn’t solve the issue either. I want the coin to be considered a total loss as far as taxes are concerned, but it’s not a coin that has been withdrawn so I can chalk it up to “lost”

@Sgt_Politeness can you create a manual transaction of a deposit of when you received the coins and then a manual transaction of when you lost the coins and then classify it as a lost and follow the article I sent above?

ere is the breakdown of classifications: Crypto Tax Classifications : Accointing AG
Here is how you are taxed per classification: https://www.accointing.com/the-hub/?s=classifications&id=3300&post_type=post

Thanks, that’s a good idea.

I’m still not entirely sure how do deal with Unknown Currencies. It seems like I can only deal with them if I assign then to a known currency, but a lot of my high risk shit coins will never be on Coin Market Cap, so I don’t know how to categorize them into their own coin. That being said, Accointing is so far the best tracking and tax tool I have tried. As far as future improvements go, it would be awesome if unknown coins could be associated with their ERC20 contract codes and values tracked Dextools.

@Sgt_Politeness - so, will preface this by saying that this a gray area in the tax law as we have no guidance from the IRS. Currently there is no way to write off a loss from worthless crypto in the US tax law. Generally would need to sell / exchange the crypto to recognize the loss, but given the lack of liquidity, that’s an issue.

With that being said, there is a case to be made that you should be able to write off the loss. So, rather than creating a manual transaction withdrawal and setting as lost, you could try the below… The issue with classifying as lost, is that it won’t show up as a taxable transaction in your tax report (which is proper based on current law).

What you could do, is create a manual transaction and say that you sold 100% of the coins for $0.01 USD. This will treat the coins as if you sold them for $0, your loss will be = your cost of the coins and this loss will flow-through the tax reports short or long term, wherever appropriate. If you want to err on the side of caution (and so your wallet doesn’t show the coins still being held), you could send the coins to an unrelated 3rd party in exchange for $.01 - so actually make the above trade and thus this would qualify as a taxable disposal and you could claim the loss.

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