Bitcoin Lost in a Wallet Hack: Can the Loss Be Claimed for Tax in Austria?
A wallet hack can amount to a complete economic loss for investors who hold Bitcoin. For tax purposes, however, losing the coins does not automatically create a deductible capital loss in Austria.
The theft of a cryptocurrency, a loss through fraud or a hacking attack, and the loss of the private key do not, in principle, constitute a disposal that is relevant for tax where the assets are held privately.
An Economic Loss Is Not a Tax Loss
Example:
- Bitcoin bought for €20,000
- the wallet is hacked
- all of the Bitcoin is stolen
Economic loss: €20,000.
For tax purposes, however, there is no disposal transaction at all. The investor has neither sold the Bitcoin nor exchanged it for another asset. In principle, therefore, no realised capital loss arises that could be offset against gains on shares, for example.
A Lost Private Key Does Not Help for Tax Either
The same applies where the Bitcoin technically still exists on the blockchain but the owner no longer has access to it. A lost private key does not, in ...
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