How do I abandon a crypto asset?

In the crypto world, you may be able to abandon an asset bysending it to a burner/null address, as mentioned above, and keeping detailed documentation to support the deduction. For example, say you have Coin X in your wallet. You paid $1,000 to obtain it but now the position is worth only a small fraction of a cent.

What happens if you sell a crypto asset before 2025?

In contrast with capital losses from sales or exchanges, abandoned or worthless crypto results in ordinary losses. But the catch is that the ordinary losses are miscellaneous itemized deductions that are not deductible until 2025. Accordingly, it is better to get out early by selling the assets (see above) or to have them stolen (see below).

What are the most common crypto losses?

A taxpayer’s most typical losses are capital losses from the sale or taxable exchange of a crypto asset. Capital losses can offset capital gains, both long-term and short-term, and up to $3,000 per year of ordinary income. Example: Bette purchased some titan for $200,000.