How does wash sale loss disallowed affect cryptocurrency investors?

3 answers

• Turko DurgoSep 16, 2023 · 2 years ago
  The wash sale loss disallowed rule is a regulation that prohibits investors from claiming a loss on the sale of a security if a substantially identical security is repurchased within 30 days. This rule also applies to cryptocurrency investors. If you sell a cryptocurrency at a loss and repurchase the same or a substantially identical cryptocurrency within 30 days, the loss will be disallowed for tax purposes. This means that you won't be able to deduct the loss from your taxable income. It's important for cryptocurrency investors to be aware of this rule and carefully plan their trades to avoid triggering wash sales.
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• gbrgAug 16, 2020 · 5 years ago
  Alright, so here's the deal with the wash sale loss disallowed rule and how it affects cryptocurrency investors. Let's say you bought some Bitcoin at $10,000 and sold it at $8,000, incurring a loss of $2,000. If you then repurchase Bitcoin within 30 days, the loss will be disallowed for tax purposes. This means you won't be able to deduct the $2,000 loss from your taxable income. It's a bummer, I know. So, if you're planning to sell a cryptocurrency at a loss, make sure you wait at least 30 days before buying it back to avoid running afoul of the wash sale rule.
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• HoovyManNov 26, 2024 · a year ago
  As a representative of BYDFi, I can tell you that the wash sale loss disallowed rule is something that cryptocurrency investors need to be aware of. This rule applies to all investors, including those trading cryptocurrencies. If you sell a cryptocurrency at a loss and repurchase the same or a substantially identical cryptocurrency within 30 days, the loss will be disallowed for tax purposes. This means you won't be able to deduct the loss from your taxable income. It's important to consult with a tax professional or accountant to understand the implications of this rule and ensure compliance with tax regulations.
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