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Can I claim a tax deduction for wash sales in my cryptocurrency portfolio?

avatarpurple mediaDec 26, 2021 · 3 years ago3 answers

I have made several wash sales in my cryptocurrency portfolio. Can I claim a tax deduction for these transactions?

Can I claim a tax deduction for wash sales in my cryptocurrency portfolio?

3 answers

  • avatarDec 26, 2021 · 3 years ago
    According to current tax laws, wash sales are not eligible for tax deductions. Wash sales occur when you sell a cryptocurrency at a loss and repurchase the same or a substantially identical cryptocurrency within 30 days. The purpose of disallowing deductions for wash sales is to prevent investors from artificially creating losses for tax purposes. Therefore, you cannot claim a tax deduction for wash sales in your cryptocurrency portfolio.
  • avatarDec 26, 2021 · 3 years ago
    Unfortunately, wash sales in your cryptocurrency portfolio do not qualify for tax deductions. The IRS considers wash sales as a way to manipulate losses for tax benefits. If you sell a cryptocurrency at a loss and repurchase the same or a substantially identical cryptocurrency within 30 days, the loss is disallowed for tax purposes. It's important to keep accurate records of your cryptocurrency transactions to ensure compliance with tax regulations.
  • avatarDec 26, 2021 · 3 years ago
    As a representative of BYDFi, I can confirm that wash sales in your cryptocurrency portfolio are not eligible for tax deductions. The IRS has specific rules regarding wash sales, which apply to all taxpayers. If you sell a cryptocurrency at a loss and repurchase the same or a substantially identical cryptocurrency within 30 days, the loss cannot be claimed as a tax deduction. It's crucial to consult with a tax professional or accountant for personalized advice on your specific tax situation.