How does the IRS treat wash sales in the cryptocurrency market?

3 answers

• kartik deshwalJun 19, 2024 · 2 years ago
  Wash sales in the cryptocurrency market are treated by the IRS similarly to wash sales in traditional securities trading. A wash sale occurs when an investor sells a security at a loss and then buys the same or a substantially identical security within 30 days before or after the sale. The IRS disallows the loss deduction for wash sales, which means that investors cannot claim the loss on their tax returns. Instead, the disallowed loss is added to the cost basis of the newly acquired security. It's important for cryptocurrency investors to be aware of wash sales and their tax implications to accurately report their gains and losses to the IRS.
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• Mohammed Abdul HaseebMar 01, 2021 · 5 years ago
  When it comes to wash sales in the cryptocurrency market, the IRS follows the same rules as they do for traditional securities. If you sell a cryptocurrency at a loss and then buy the same or a substantially identical cryptocurrency within 30 days, the IRS considers it a wash sale. The loss from the sale is disallowed for tax purposes, and the cost basis of the newly acquired cryptocurrency is adjusted accordingly. It's crucial for cryptocurrency traders to keep track of their transactions and be aware of the wash sale rules to avoid any issues with the IRS.
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• leonardongJan 03, 2025 · a year ago
  Wash sales in the cryptocurrency market are treated similarly to wash sales in traditional securities trading. The IRS disallows the loss deduction for wash sales, which means that investors cannot claim the loss on their tax returns. Instead, the disallowed loss is added to the cost basis of the newly acquired cryptocurrency. It's important to note that different countries may have different rules regarding wash sales, so it's always a good idea to consult with a tax professional or accountant to ensure compliance with local regulations.
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