How not to end up in custody

Anyone who trades in cryptocurrencies and does not want to share the fate of Sam-Bankman Fried should also think about their tax return in the new year. Software tools can save you a lot of time and trouble. Because the rules are complex and the German judiciary is not particularly lenient when it comes to tax offences.

You can get more information in the BTC-ECHO review section on crypto control tools

Tax free after one year

Basically: Anyone who buys cryptocurrencies in Germany and keeps them for one year can sell them tax-free after this period has expired. One speaks here of the speculation period. However, if the purchase and sale are within a period of one year, any profits must be taxed. The exchange from one cryptocurrency to another is also considered a sale.

This scheme is not very complicated. The crux of the tax return does not lie in the lack of transparency of the rule, but in keeping an overview of your transactions. Anything that goes beyond consistent “hodlning” can quickly grow into an opaque web of transfers, swaps, and holding periods. Some exchanges and wallet providers offer the possibility of creating a transaction report, but this only records the balances of an account. These services do not offer a cross-platform view of the entire portfolio.

Less stress with tax software?

So-called crypto tax tools can help. Because they started exactly at this point. Investors can link their accounts to the tax software and get a comprehensive view of all transactions and holdings. The programs are able to summarize these for you and create a report that can be attached to the tax return.

We have summarized for you which programs are available, what they can do and cost in particular. BTC-ECHO tested eleven providers.

You can get more information in the BTC-ECHO review section on crypto control tools

Incidentally, these tools are not only of great use for tax returns. They also help you keep track of your investments.