YEAR END TAX MOVE - Wash Sale Rules Don't Apply To Crypto
If you hold positions in crypto, this is for you.
Wash sale rules don't apply to crypto! What does this mean for you?
Well, first, what's a wash sale?
Pretty simple: if you sell a stock at a loss and within 30 days before or after the sale, you buy the same stock, then you can't deduct the loss . (Instead, the loss is added to your cost basis of the property)
However, wash sale rules don't apply to crypto (yet)! That's because per IRS, crypto is not a security, but instead, defined as property. And property isn't subject to wash sale.
So what this means for you is that considering crypto has not performed well recently, some of you may have loss positions. If you were to sell your loss position today and buy back the same position tomorrow, you get to use that loss as a deduction against any current or future sales from crypto, stock or any other investment that produces a capital gain.
Hope this helps. If you have questions, let me know.