Binance - Get All New Blogs About Binance
Cryptocurrency Tax Loss Harvesting: Cut Your Tax Bill
Cryptocurrency investors know that the market can be volatile. But even in a down year, there's a silver lining: tax loss harvesting . This strategy can help you reduce your tax liability by offsetting capital gains with capital losses, potentially saving you thousands. In this blog post, we’ll break down what crypto tax loss harvesting is, how it works, legal considerations, and how to implement it effectively. What is Tax Loss Harvesting? Tax loss harvesting is the process of selling investments at a loss to offset gains made on other investments, thus reducing your taxable income. It’s a common strategy in the world of stocks and bonds—and it applies to cryptocurrencies too. In the U.S., the IRS treats cryptocurrency as property , meaning capital gains tax rules apply to crypto sales. How Tax Loss Harvesting Works for Crypto Let’s say you bought Bitcoin at $40,000 and sold it at $30,000, realizing a $10,000 capital loss. You can use that $10,000 loss to: Offset any c...
Comments
Post a Comment