tl;dr– This is known as a capital loss. You are stated to understand the capital loss for those who promote the Bitcoins on the lower cost, such that you just misplaced cash because of having purchased/bought them. Alternatively, notice that this is not felony recommendation and I am not sure about what the present felony statutes are surrounding Bitcoin.

Bitcoin’s a capital asset (a minimum of conceptually; dunno about legally):

A capital asset is outlined to incorporate assets of any type held by way of an assessee, whether or not attached with their trade or occupation or now not attached with their trade or occupation. It comprises a wide variety of assets, movable or immovable, tangible or intangible, mounted or circulating. Thus, land and construction, plant and equipment, motorized vehicle, furnishings, jewelry, direction allows, goodwill, tenancy rights, patents, emblems, stocks, debentures, securities, gadgets, mutual finances, zero-coupon bonds and so forth. are capital property.

–“Capital asset”, Wikipedia [links omitted]

When a capital asset appreciates in worth, it is referred to as a capital acquire, and could also be topic to capital good points tax. And when a capital asset depreciates in worth, it is referred to as a capital loss (and once in a while ends up in a discounted tax burden).

Till you if truth be told promote the Bitcoins, the loss is thought of as unrealized:

What’s an ‘Unrealized Loss’

An unrealized loss is a loss that effects from retaining onto an asset after it has diminished in value, reasonably than promoting it and knowing the loss. An investor would possibly wish to let a loss pass unrealized within the hope that the asset will in the end get well in value, thereby a minimum of breaking even or posting a marginal benefit. For tax functions, a loss must be learned prior to it may be used to offset capital good points.

–“Unrealized Loss”, Investopedia [links omitted]

If you do promote the Bitcoins, then you understand how much cash you’ve gotten won/loss. This is known as realization:

DEFINITION of ‘Discovered Loss’

A loss is known when property are bought for a value not up to the unique acquire value. Discovered loss happens when an asset which was once bought at a degree known as value or e book worth is then dispensed for a price underneath its e book worth. Even if the asset can have been held at the stability sheet at a good worth degree underneath value, the loss handiest turns into learned as soon as the asset is off the books.

–“Discovered Loss”, Investopedia [links omitted]

Abstract

If you purchase Bitcoins they usually depreciate in worth, then:

• You might have suffered a capital loss.

• Earlier than you promote the Bitcoins, it is an unrealized capital loss.

• After you promote the Bitcoins, it is a learned capital loss.