Some U.S. lawmakers are pushing to apply traditional wash sale rules to crypto assets, a move aimed at closing a tax loophole that has existed for years. Under current rules, investors in stocks and other securities cannot claim a capital loss for tax purposes if they repurchase the same or a substantially identical asset within 30 days before or after selling it at a loss. Crypto assets such as Bitcoin and Ether are not currently subject to that restriction because they are treated as property under U.S. tax law rather than securities. That distinction has allowed investors to realize tax losses while effectively keeping the same market exposure, a strategy commonly described as tax-loss harvesting without meaningfully changing the position. The push from lawmakers would put digital assets under the same type of wash sale framework already used for traditional securities.
Some U.S. lawmakers are pushing to bring crypto assets under traditional wash sale rules in an effort to close a long-standing tax loophole, according to Odaily.
Under current rules, investors in stocks and other securities cannot claim a capital loss for tax purposes if they repurchase the same or a substantially similar asset within 30 days before or after selling it at a loss.
Crypto assets such as Bitcoin and Ether are not bound by that rule because they are treated as property under U.S. tax law. That has allowed investors to harvest tax losses without changing their holdings.
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