Time’s running out for crypto tax loss harvesting

We’re almost at the end of the year, and if you’re holding crypto, you’ve got just a little time left to pull off one of the few tricks that actually works when the market’s all over the place: tax loss harvesting. Prices for a lot of big-name tokens are way down from where they were, so these last weeks are a rare chance to turn your paper losses into something that actually helps at tax time.

Here’s the deal. Tax loss harvesting means you sell off crypto that’s in the red, and those losses cancel out capital gains you’ve made somewhere else maybe on other coins, maybe on stocks. That means a smaller tax bill. In some places, if you rack up more losses than gains, you can even roll that extra loss into future years. That’s a nice bonus.

But you’ve gotta move fast. If you want those losses to count for this tax year, you have to sell before the year ends. Wait until January, even by a single day, and you’ve missed your shot until next year’s taxes. Crypto markets still get wild, and liquidity isn’t always there when you need it, so waiting until the very last minute? Not a great idea.

There’s another angle, too. Crypto, unlike stocks in a lot of countries, doesn’t have strict wash-sale rules yet. That means you can sell at a loss, grab the tax break, and then buy back in fast no need to stay on the sidelines. Of course, regulators are watching, and you can bet they’re going to close this loophole sooner or later. When that happens, this move might disappear for good.

Bottom line: tax loss harvesting isn’t about giving up on crypto. It’s about playing smart. If you pass it up, you could end up handing more money to the taxman than you need to. But if you act now, you’ll keep more of what’s yours, even in a rough year.

The year’s almost over. Don’t let this deadline slip by.