Solana-hacked crypto could be claimed as a tax loss: Experts

Unlucky crypto investors who want to make lemonade out of lemonade can claim digital assets that were lost in an exploit or hack as a tax loss if they live in the right country, experts have told Cointelegraph.

This may provide some comfort after the announcement that more than 8,000 Solana accounts had been compromised. An estimated $8 million in crypto was stolen in a security breach in Web3’s network.

The Solana hack, and it’s possible tax consequences: A thread https://t.co/JnYMrkB8qJ
— Crypto Tax Calculator (@CryptoTaxHQ), August 3, 2022

Cointelegraph spoke with Shane Brunette, CEO of CryptoTaxCalculator, an Australian company that confirmed that crypto was lost through a hack or exploit. This could be used to declare it as a tax loss in certain jurisdictions.

“This means that the original amount paid for the asset(s), can be used to offset any capital gains.”

Brunette answered the question: “Are there similar provisions in other tax jurisdictions than Australia?”

“Many countries allow these tax deductions […] but you need to work closely with local tax professionals and ensure you have adequate proof of the loss.

Cointelegraph was confirmed by Danny Talwar, Head Tax at Koinly. He stressed however that one must show that the crypto that was lost was theirs at the time that it was stolen.

To claim a capital loss due to hacked crypto, the Australian Tax Office will need evidence that the crypto was lost and that it was your fault.

Talwar stated that it was crucial that the tax authority had enough evidence to prove crypto unretrievable. This suggested the use of Ethereum explorer tools such as Solscan and Etherscan to provide evidence of the hacker’s destination address. It may also be used to show evidence of large amounts of hacked funds.

Australian tax laws require that any evidence of hacking must include dates relating to the acquisition or loss of private keys and all associated wallet addresses.

Related: Solana wallets “compromised, abandoned” as users warn of scam solutions

According to CryptoTaxCalculator, claiming hacked crypto is no longer possible as a tax loss for U.S. crypto investors.

Things are more difficult for those who live in Canada and the UK, but it is possible to file a tax loss claim if you are willing to follow the steps provided by each country’s taxation offices.

Hackers and other malicious actors have lost approximately $2.6 billion worth of digital assets this year, with 69% of that amount being lost to cross-chain bridge attacks.

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Jason Basler– Financial Updates My Name is Jason Basler and I am also the main source from the ‘Topnewsscoop.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor. Address: 4830 Crim Lane Dayton, OH 45402, United States of America Phone Number:  +1 937 727 7917 Email: [email protected]

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