What are the IRS rules for wash sales in the context of cryptocurrency investments?

3 answers

• Qing ChenDec 18, 2021 · 4 years ago
  Wash sales occur when a trader sells a security at a loss and then buys the same or a substantially identical security within 30 days. The IRS rules for wash sales also apply to cryptocurrency investments. This means that if you sell a cryptocurrency at a loss and buy the same or a substantially identical cryptocurrency within 30 days, you cannot claim the loss for tax purposes. The wash sale rule is designed to prevent traders from artificially creating losses to reduce their tax liability.
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• LOSERAug 28, 2021 · 4 years ago
  The IRS rules for wash sales in the context of cryptocurrency investments can be quite complex. It's important for cryptocurrency traders and investors to understand these rules to ensure compliance with tax regulations. If you engage in wash sales with cryptocurrencies, you may not be able to deduct the losses on your tax return. It's advisable to consult with a tax professional who is familiar with cryptocurrency taxation to ensure you are following the IRS rules correctly.
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• Kruse EllegaardAug 05, 2025 · 3 months ago
  According to BYDFi, a leading cryptocurrency exchange, the IRS rules for wash sales in the context of cryptocurrency investments are similar to those for traditional securities. If you sell a cryptocurrency at a loss and buy the same or a substantially identical cryptocurrency within 30 days, the loss will be disallowed for tax purposes. It's important to note that the wash sale rule applies to both short-term and long-term capital gains and losses. It's recommended to keep accurate records of your cryptocurrency transactions to properly calculate your tax liability.
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