Hello 👋 ,
This article helps you understand how capital losses are handled in the Waltio tool and how they should be reported.
In Spain, the personal income tax is composed of two categories of income which are also composed of subcategories :
The general taxable base (general income) :
Income from work,
Income from economic activities,
Income from gains and loss not deriving from the transfer of assets.
The savings taxable base :
Income from capital,
Income from gains and loss that derive from the transfer of assets.
Each category has different rules regarding capital losses.
👉 Losses on the general base
Capital losses are losses due to hacks, losses or platform failures.
Example:
You have a total general income of €50,000 in the year 2023.
You lost €2,000 in a scam.
A platform on which you were holding funds went bankrupt and you lost €3,000.
You have realised a total loss of €5,000 on the general base.
❗️To be able to deduct scams from the amount of tax in this category, you'll need solid proof and to contact your tax authorities. Specific forms will need to be completed and returned for the administration to accept the tax reduction.
This is a specific and complex procedure, contact your administration if you wish to deduct cryptocurrency losses from your other income.
👉 Losses on the savings base
Capital losses from the purchase and sale of cryptocurrencies will be deductible on the entire savings block.
In the case of cryptocurrencies, the base of savings income will be made up of the positive balance resulting from integrating and offsetting, exclusively among themselves, in each tax period the income from capital and the capital gains and losses arising on the transfer of assets and liabilities.
▶️ If the result is a negative balance, its amount will be compensated with the positive balance of the income of the other section, obtained in the same tax period, with the limit of 25% of such positive balance.
▶️ If after such compensation a negative balance remains, its amount will be compensated in the following four years in the same order.
Example:
You have a capital income of €4,000 from staking
And you have a capital loss of €6,000 from trading crypto (gains that derive from the transfer of assets).
▶️ Losses are deductible for a maximum of 25% in the current year.
You can deduce 25% from the gain of €4,000 so €1,000.
▶️ The remaining 75% will be deductible in subsequent years and can be carried forward for up to 4 years.
The other €5,000 losses could be deducted over the next 4 years.
If you have any further questions, please contact us via the chat just below on the right of your screen! 💬
Waltio team 💙