source avatarCrypto Tax Made Easy

Share
Share IconShare IconShare IconShare IconShare IconShare IconCopy

If you end up losing money from bad debt in Aave, I’ve got more bad news 😞 With theft losses like the Drift hack, you can potentially write off the loss against income. That’s a huge tax deduction. But supplying WETH on Aave means you actually swapped for a new token aWETH. You will still be able to swap back from aWETH to WETH. And this will likely result in a loss. But you can only use losses to offset gains or max $3k against income. If your losses exceed $3k, it might take years to get the tax benefit. Vs. a theft loss where it can be written off against income in the current year. Hopefully Aave’s umbrella can help cover all or most of the bad debt 🙏🏻

Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information. Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.