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Level 1
posted Nov 16, 2022 11:53:52 AM

Crypto trade loss write off

What documentation is needed to write off a trade loss? If the loss was substantial would only $3000 of that be written off towards income? 2nd scenario, if there was a gain (say home sale profit) and the trade loss. Would the trade loss offset the capital gains of the home sale?

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1 Replies
Expert Alumni
Nov 16, 2022 2:08:07 PM

You would report the sale of the Crypto like you would report the sale of any security.  On your Schedule D.  You are correct that you can deduct a $3,000.00 loss, providing there are no other gains, per year until the balance is used up.  

As far as the gain from the sale of a house, you didn't specify if it was a your primary residence or a rental property.  Rental property would be a capital gain and would be offset by any capital loss.  Personal property would be an ordinary gain.  Thus, it won't be offset by any capital loss.