Cryptocurrency and the Wash Sale Rule: A Tax Loophole That May Soon Go Away
You might not realize it by looking at today’s booming crypto market performance, but in the not-too-distant past, cryptocurrencies fell to some of their lowest prices of the year. Bitcoin hit an all-time high in May but then quickly pulled back to lower levels. Nearly every cryptocurrency followed suit. This wasn’t the first time it happened, and it’s almost surely not the last.
While this might seem like a distressing situation for investors speculating on these coins’ long-term appreciation potential, some alert investors welcome opportunities like these with open arms. Why?
The IRS classifies virtual currencies like Bitcoin, Ethereum, or even Shiba Inu as property. This means crypto investors are subject to the same and losses that apply to other investors, but with one important difference. They escape one rule that applies solely to financial securities: the .
