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Report your crypto investments to Verohallinto: Lesson #11


Investing in cryptocurrencies can be a great way to grow your wealth. However, like any investment, it comes with risks. Volatility, market uncertainty, and cybersecurity threats are just a few risks associated with cryptocurrency investing.

As a responsible cryptocurrency provider, we want to help you mitigate those risks and protect your investments. This week, we’ll share an overview of risk management and some strategies that can help traders and investors minimize their financial risks.

Risk management in economics is a framework that outlines how companies or investors handle financial risks inherent to all kinds of businesses. For traders and investors, this framework might include managing multiple asset classes, such as cryptocurrencies, Forex, commodities, shares, indices, and real estate.

The risk management process typically involves five steps: setting objectives, identifying risks, risk assessment, defining responses, and monitoring.

As tax season approaches, we understand that many of our customers have questions about how to report their crypto investments to Verohallinto, the Finnish Tax Administration. At Coinmotion, we believe that transparency and compliance are crucial for the longevity and success of the cryptocurrency industry. 

Therefore, we have prepared this lesson to provide you with a comprehensive guide on reporting your crypto investments to Verohallinto.

  1. Determine Your Taxable Events

The first step in reporting your crypto investments to Verohallinto is determining your taxable events. A taxable event is any action that triggers a tax liability. In the case of cryptocurrencies, taxable events include:

  • Selling cryptocurrency for fiat currency (e.g., selling BTC for EUR)
  • Exchanging one cryptocurrency for another (e.g., trading BTC for ETH)
  • Receiving cryptocurrency as payment for goods or services
  • Mining or staking cryptocurrency

It’s important to note that buying and holding cryptocurrency is not a taxable event. However, if you sell your cryptocurrency at a profit, you will be subject to capital gains tax.

  1. Calculate Your Capital Gains or Losses

If you have realized capital gains or losses from your cryptocurrency investments, you must calculate them and report them on your tax return. Capital gains are calculated by subtracting the cost basis (i.e., the price you paid for the cryptocurrency) from the sale price. If the result is positive, you have realized a capital gain. If the result is negative, you have realized a capital loss.

For example, if you bought 1 BTC for 10,000 EUR and sold it for 12,000 EUR, you would have realized a capital gain of 2,000 EUR.

  1. Report Your Crypto Investments on Your Tax Return

Once you have determined your taxable events and calculated your capital gains or losses, you must report them on your tax return. Verohallinto considers cryptocurrencies property, which means that you will report your crypto investments in the same form as other capital assets, such as stocks or real estate.

You will need to report the date of the taxable event, the amount of cryptocurrency involved, the value of the cryptocurrency at the time of the event, and any associated expenses or fees. You may also need to provide documentation, such as trade confirmations or transaction histories, to support your calculations.

  1. Keep Accurate Records

To ensure that you accurately report your crypto investments to Verohallinto, it’s essential to keep detailed records of all your transactions. This includes the transaction date, the amount of cryptocurrency involved, the value of the cryptocurrency at the time of the transaction, and any associated expenses or fees.

By keeping accurate records, you can quickly and easily calculate your capital gains or losses and report them on your tax return.

At Coinmotion, we take our commitment to transparency and compliance seriously. We provide our customers with the tools and resources they need to stay on top of their tax obligations and ensure that they are fully compliant with all applicable regulations.

If you have any questions about how to report your crypto investments to Verohallinto, please do not hesitate to contact us. Our team of experts is always available to help you navigate the complex world of cryptocurrency taxation.

Learn more: Crypto and Taxes: Everything You Need to Know This Tax Season

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