Current Events > Tax loopholes

(+) Yeah! (+)

You can deduct $3000 from your taxes as a capital loss if you buy crypto, go into the red, sell at a $3000 loss, wait one day, and then buy back in.

This is not investment advice. Consult with a real tax professional.

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Is this a serious topic? Because that's called a wash sale homie and trust me uncle sam knows what it is and will get his piece

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Thunder Warrior posted...

Is this a serious topic? Because that's called a wash sale homie and trust me uncle sam knows what it is and will get his piece

It's a wash sale on the stock market, but the crypto market is unregulated by the SEC.

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Fair enough...crypto is outside my circle of competence so I can't speak on it

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that's when the IRS sends in their goons for your kneecaps

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It lowers your taxable income by $3000, it doesn't lower your taxes by $3000. There's a difference there
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Do not try this and expect things to go in your favor.

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I'm a CPA and I'd be fairly comfortable with a client doing this. The "wait a day" thing isn't anywhere in the law that I'm aware of. People say that because the IRS can disallow the transaction if the sole purpose is to avoid taxes. That's why you don't want to sell and then buy back immediately. You may be safer waiting a few days, but the crypto market is volatile enough that a day can give you significant exposure. Then again, the IRS doesn't like crypto so they could decide to crack down on this.

As a crypto investor, I like to be conservative as possible with taxes. I use FIFO to calculate my basis in any sold coins, and won't be doing any loss harvesting. But to each his own.

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Just don't do taxes. What are they going to do, come after you? Ooh, scary.

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Simp posted...

Just don't do taxes. What are they going to do, come after you? Ooh, scary.

They can throw you in jail.

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