Crypto: wash‑sale loophole noted
A crypto commentator pointed out that U.S. wash‑sale rules — which block claiming a loss if you repurchase the same stock immediately — currently don’t apply to cryptocurrencies, allowing traders to realize a taxable loss and rebuy straight away. That tip was shared alongside other weekend tax‑saving suggestions from personal‑finance accounts. (x.com) (x.com)
U.S. crypto traders can still sell Bitcoin or another token at a loss, buy it back right away, and keep the tax loss under current federal rules. Section 1091 of the tax code still applies to “stock or securities,” not digital assets. (uscode.house.gov) (ecfr.gov) The Internal Revenue Service treats cryptocurrency as property for federal income tax purposes, and it says taxpayers must recognize gain or loss when they sell it. The agency tells taxpayers to report digital-asset sales on Form 8949 and Schedule D. (irs.gov 1) (irs.gov 2) That gap is what tax planners call a wash-sale loophole. For stocks, a loss is disallowed if an investor buys substantially identical shares within 30 days before or after the sale, creating a 61-day window around the trade. (law.cornell.edu) (ecfr.gov) The point matters in April because realized losses can offset realized capital gains on a federal return. If losses exceed gains, the Internal Revenue Service says individuals can generally deduct up to $3,000 against other income and carry the rest forward. (irs.gov 1) (irs.gov 2) Congress has been aware of the issue for years, and tax writers have repeatedly described digital assets as outside the current wash-sale rule. A September 2025 Joint Committee on Taxation report included a section on wash sales in its review of digital-asset tax issues. (jct.gov) Lawmakers have also floated changes rather than enacted them. Senator Cynthia Lummis introduced S. 2207 on June 30, 2025, and Congress.gov shows the bill was referred to the Senate Finance Committee the same day. (congress.gov) Reporting rules for crypto have tightened even without a wash-sale change. Treasury and the Internal Revenue Service said brokers must report gross proceeds on Form 1099-DA for digital-asset transactions starting January 1, 2025, and basis reporting begins for certain transactions on January 1, 2026. (irs.gov) Policy groups disagree on what should happen next. Coin Center said in a 2026 priorities paper that Congress should forgo a wash-sale rule for crypto, while other tax-policy advocates have argued digital assets should be treated more like stocks for loss harvesting. (coincenter.org) (taxlawcenter.org) For now, the practical rule is simple: crypto losses are reportable, broker reporting is expanding, and the stock-style wash-sale bar still has not been written into federal law for most digital assets. Anyone trying it still has to keep records and calculate basis correctly. (irs.gov 1) (irs.gov 2)
