When you open your mailbox and see a letter from the taxman, you go through the five stages of emotions before you finally tear it open and hope for the best. For one unfortunate crypto trader in Sweden, tearing open the letter resulted in what we can only imagine gave him a heart attack. Reading the letter with clammy hands, Linus Dunkers discovered that the Swedish tax man was charging him a whopping $885,000 in tax for crypto trading activities. Naturally, Dunkers wasn’t happy with the bill and has decided to take the bill to court.
Honesty Is the Best Policy – or Is It?
Dunkers had traded more than $2.8 million worth of Bitcoin over the course of tens of thousands of trades since 2014. In a bid to make sure that everything was in order and that he paid the correct amount of taxes, he took a trip down to the tax office. After disclosing all of his activities and portfolios, he expected the tax authorities to say he owed a couple of thousand dollars.
In what Dunkers’ describes as a like a scene from a movie, four agents knocked on his door a few weeks later and knew everything about him – even his dog’s name. It’s apparent that after his conversation with the tax agency they did their homework on Dunkers, but knowing the dog’s name is just a step too far in our books – and apparently in Dunkers’ too.
A Contentious Subject
Dunkers claims that despite trading so much over the four-year period, he actually has a very low profit margin. Under capital gains and loss laws, this would put his tax bill somewhat three times less than the government is claiming. Due to the vast amount Dunkers has traded has led the tax man to tax his activity as if it were a business, something that is hampering his efforts to make the tax man see straight. This combined with the unnecessary stalking of his life has given Dunkers a good shot at winning his case in court.
Crypto Tax Laws Coming into Place
Countries around the world are slowly starting to implement their own tax laws, and Sweden is amongst the pack. In neighboring Denmark, crypto traders are scared to declare their crypto earnings due to the fact the tax man could take up to 53% of all profits. While this isn’t the same situation around the globe, many jurisdictions are starting to clear up the enigma that is crypto tax.
Hopefully for Dunkers, he can make the court see sense and force the tax man to recalculate the total figure owed. A tax bill for $885,000 is no joke, and it’s large enough to force Dunkers into debt for many years to come. If Dunkers can make enough in losses, he might be able to use capital loss laws to get most of that debt cancelled out – we certainly wish him the best of luck with what’s sure to be a lengthy battle in court!