Save money on taxes using crypto tax loss harvesting 🪙⚠️🚀😳
In the U.S., crypto is considered property for tax purposes. That classification opens up a legal way to reduce your tax bill when prices drop. The wash sale rule, which applies to stocks and mutual funds, does not apply to crypto. You can sell a coin at a loss, buy it right back, and still claim the full loss when you file your taxes.🎯🤡
🤔👉 Say you bought 1 Bitcoin at $120,000 in August. Today it's worth $88,000. You sell it and immediately repurchase the same amount. That $32,000 difference becomes a realized capital loss. Even though your holdings haven't changed, the IRS sees the sale as a taxable event and allows the deduction.
You can use that loss to offset capital gains from other investments like stocks or other crypto. If you don’t have gains this year, up to $3,000 can be applied against ordinary income such as your salary. Any remaining losses roll forward to future years and can be used the same way 💸💲💵💸🏧
This strategy works best if you keep clear records, including exact dates and amounts. If you're using a centralized exchange, download your transaction history and confirm that cost basis and proceeds are being tracked accurately. Crypto loss harvesting is legal, straightforward, and especially valuable during a market downturn.
Also note, that repurchasing resets your basis (and usually your holding period) in the new lot. That can change whether a later gain is short-term vs long-term. So this is a tradeoff we make when doing this tax loss harvesting 🤑💯😎
Outside the U.S., similar crypto loss–harvesting strategies fully or partially work in countries like the UK, Germany , Italy, and France (with restrictions)😩🌍
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