@grok is this legal?
>>62301796iirc I don't think the wash sale rule applies to crypto yet, so yes you can if that is true. You might get in trouble if your dealing with a significant sum though or like sell enough to deduct your entire taxable income and your job isn't a Mcwage job, the IRS has a catch-22 called the economic substance doctrine where they could argue that you were trying to fleece them in an audit or court proceeding.
There are actively managed funds that intentionally do stuff like this to get you tax breaks every year.
>>62301873Capital losses can only be used to offset capital gains, not wage income.
>>62301796the IRS doesn't mind if you do this
>>62301884Yeah you're right
>>62301820No, it isn't. It's a wash sale unless at least a month has passed.Besides, there are state that cap your losses for deduction to something like 3k per year. You can't report more than that.
>>62301796Also OP You can only offset your capital gains to 3k in that case, but you can rollover beyond that I think indefinitely. Don't take this drunkies advice to heart though it's just what I remember from filling out my own tax forms
>>62301905could probably buy back into a bitcoin etf and get away with it...wont be able to buy illicit goods anymore though
>>62301920I thought it was unlimited against capital gains but limited against income.
>>62301947Prettu sure it isn't. 3k a year, tops. So good luck with that 13 years writing off your shitcoin loss :)
>>62302187not true it offsets capitalized gains
>>62302187Nah I'm right. Capital losses have unlimited offset against capital gains as long as they are both short or long term. The $3k limit your talking about is offsetting regular income with capital losses
>>62301931just buy WBTC lmao
>>62301884You can deduct up to 3000 dollars a year in capital losses from your earned income
>>62301796And then when you sell it at 100k at a real loss of 26k you have to pay taxes on fake capital gains of 11k.Fucking idiot
Creative account hack
Illegal in my country.
>>62301905in germany it's legal.
Yes and I do this but I'm in the UK so you have to wait 30 days to buy back (bed & breakfast rule), or you can swap it to another token like WBTC.
>>62301796False. the us gov only accepts 3k in losses per year.
>>62301884Wrong, I've taken the max deduction every single year for the past 5 years because I blow at trading
>>62301796You can do this assuming the investment isn’t subject to wash sale rules. You can also swap between bitcoin ETFs that aren’t considered substantially identical. However doing this is going to make your cost basis much lower so when you sell in the future at a profit, you’ll have higher levels of taxable gains.
>>62303255You can harvest unlimited losses to offset capital gains. If you sell stock A at a 5 mil profit and sell stock B at a 3 mil loss, you’ll only have 2 mil in taxable gains that year. The 3k limit only applies to lowering MAGI.
>people on /biz/ dont understand how capital gains taxes workjesus christ guys get it together
>>62303270based
>>62301905There is no wash sales on crypto because its not a security, its classified as "property". That said its still not good to take losses. Making 10k is always better than losing 10k even if it lets you defer taxes on other earnings.
>>62303351It has to be the same type of capital loss and gains though. You can't offset short term loss against long term gains.
>>62302190correct, and you carry over anything not used to the next year
>>62303503Why should we learn about a tax that we will never get to pay?
>>62303887Look how confident this utter retard is. Lot of retards in here though excluding a couple anons.It initially applies directly to the same type of capital gain/loss (short/long term). I’ll just give an example cause it’s harder to type out and explain it simply.let’s say you >realize a loss of 15k in a short term trade in Feb of 2026>in April, you close another short term trade and realize a gain of $2500 in April. >That puts you at -12500 on the year so far. Short for short, straightforward and as expected. >You make no more sales of short term holdings for the rest of the year.>in November, you sell a long term position and profit 9500 ltcg.->since you have no more short term gains to cancel out, you can apply it to your long term gain>you would end up net -3k on the year which you can then deduct from you MAGIAnd ideally if you’re really scheming and planning, you obviously don’t want to realize a long term capital gain to cut down on a realized short term loss. It’s possible in incorrect about that last sentence. I won’t be smug like the brainlet I replied to. From my understanding you can’t just defer that long term realized gain Here’s somethin I was thinking about as a possible plan I was contemplating (although I am aware about it carrying forward and I could use my “loss Bank” later in the future) , I have 19k in realized losses short from being a Stink marine already this year. I have long term precious metals, which are taxed at a rate of 28% on long term holds. I could realize my profits and sell some early gold bars that I got for low 2k as well as silver at 30, and use those short term losses to completely cancel out my realized profits in PMs 1:1.
>>62301796>henlo IRS I losted $37,000 and want a refund >yes I can hold
>>62304653And obviously, same thing applies with long term realized losses, if you have no long term gains to cancel out for that year, it can be applied to the short term gains, but Im pretty certain it isn’t at a 1:1 like that PM based legal loophole. Maybe a percentage based off your cap gains rate and your tax bracket for the year if I recall
>>62302619kek
>>62301796..............
>>62301931>wont be able to buy illicit goods anymore thoughSure you can, after 30 days.
>>62301820It would be illegal if it was anything other than bitcoin.
>>62301796Who the fuck is stupid enough to declare their crypto savings to the taxman?
>>62301820Yeah, you sell the BTC to take the loss at the end of the year and then buy something like IBIT until the year rolls over then hold IBIT for year and repeat. If you really need the BTC you could just rebuy the BTC after Jan 1
>>62301796That's the stated reason for Strategy's selling
>>62301796that's a cool trick but unfortunately it also involves being retarded enough to buy at 126k
>>62305652what gains do they have to offset though?
Good advice, except for the "buying it back" part.
>>62301796this is your brain on the bitcoin diet
