Does the wash rule for stocks also apply to cryptocurrencies?
Flowers JustinDec 27, 2021 · 3 years ago3 answers
I've heard about the wash rule for stocks, but I'm not sure if it also applies to cryptocurrencies. Can someone explain if the wash rule is applicable to cryptocurrency trading?
3 answers
- Dec 27, 2021 · 3 years agoYes, the wash rule does apply to cryptocurrencies. The wash rule is a regulation that prevents investors from claiming tax losses on a sale of a security if they repurchase the same or a substantially identical security within 30 days. This rule is designed to prevent investors from artificially creating losses for tax purposes. Since cryptocurrencies are considered property by the IRS, the wash rule applies to cryptocurrency trading as well.
- Dec 27, 2021 · 3 years agoNo, the wash rule does not apply to cryptocurrencies. Cryptocurrencies are not considered securities by the SEC, and therefore, the wash rule, which is specific to securities, does not apply. However, it's important to note that tax regulations for cryptocurrencies are still evolving, and it's always a good idea to consult with a tax professional for accurate and up-to-date information.
- Dec 27, 2021 · 3 years agoAs an expert at BYDFi, I can confirm that the wash rule does apply to cryptocurrencies. The IRS treats cryptocurrencies as property, and the wash rule is applicable to property transactions as well. It's important for cryptocurrency traders to be aware of this rule to ensure compliance with tax regulations and avoid any potential penalties.
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