crypto losses

[user17524358924]

Is it true that we can take a loss on crypto, and buy back in on the same coin/token without waiting the 30 days required for stock repurchase? What is the maximum loss that can be applied in a given year to offset gains?

[RyanH5]

A wash sale occurs whenever an investor sells a security at a loss and repurchases it again within a 61 day window (30 days before the sale and 30 days after the sale, including the sale date). Whenever this occurs, the loss from the sale is disallowed, and added back to the basis of the newly acquired security, effectively nullifying the loss.

However, the IRS currently classifies virtual currencies a property, rather than a security, and therefore the wash sale rules do not apply.

There have been proposals recently that would make changes to this and allow the wash sale rules to apply to cryptocurrencies. But, as of the date of this post, none have been enacted.

In any tax year, a taxpayer is allowed to claim losses to the extent of their capital gains in that year, plus an additional $3,000 can offset other ordinary income.

Thank you for joining us today!