What are the tax implications of IRS Code Section 1091 for cryptocurrency traders?

1 answers

• Mar 21, 2022 · 3 years ago
  The tax implications of IRS Code Section 1091 for cryptocurrency traders are important to understand. This section of the code deals with wash sales, which occur when a trader sells a security at a loss and repurchases the same or a substantially identical security within 30 days. The purpose of this rule is to prevent traders from claiming artificial losses for tax purposes. For cryptocurrency traders, this means that if you sell a cryptocurrency at a loss and repurchase the same or a similar cryptocurrency within 30 days, the loss will be disallowed for tax purposes. This can have a significant impact on your tax obligations and reporting requirements. It is crucial to keep accurate records of your trades and consult with a tax professional to ensure compliance with IRS regulations.
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