What are the tax implications of a wash sale in the context of cryptocurrency trading?

1 answers

• Harshit GuptaAug 21, 2020 · 5 years ago
  As a representative of BYDFi, I can provide some insights into the tax implications of a wash sale in the context of cryptocurrency trading. Wash sale rules apply to cryptocurrencies just like they do to stocks and other securities. If you sell a cryptocurrency at a loss and repurchase the same or a substantially identical cryptocurrency within 30 days, the loss from the sale will be disallowed for tax purposes. The cost basis of the repurchased cryptocurrency will be adjusted to include the disallowed loss. This means that the loss is not deductible in the current tax year but is instead added to the cost basis of the repurchased cryptocurrency. It's important to keep accurate records of your cryptocurrency transactions and consult with a tax professional to ensure compliance with the tax regulations. Please note that the tax implications of a wash sale may vary depending on your jurisdiction, so it's important to consult with a local tax advisor for specific guidance.
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