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IRS is planning to extend “wash sale” rule to Bitcoin and all crypto. The “wash sale” rule disallows claiming losses on any asset sold and re-bought within 31 days. It will kill day trading through new and substantial tax liability for active traders of Bitcoin and other crypto.

[https://www.forbes.com/sites/shehanchandrasekera/2021/09/13/cryptocurrency-may-soon-be-subject-to-wash-sale-rules/?sh=35d5a17159d3](https://www.forbes.com/sites/shehanchandrasekera/2021/09/13/cryptocurrency-may-soon-be-subject-to-wash-sale-rules/?sh=35d5a17159d3)



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30 Comments

  1. Day trading exists in the equities market. It won’t kill it. But day traders are really the ones causing so much volatility anyway. So if it did chill the day trading activity, it would probably benefit long term investors/hodlers.

  2. Fuck that if it’s a backward looking change. Would cost me tens of thousands after doing it ONCE during the crash.

    What fucking bullshit.

    Edit: alright cool it’s not.

    I suppose this would get rid of the ridiculously suspect pumps of $1,500 followed by stability for a few hours, only to return to the same exact price point hours later. Those are definitely traders, any restriction on that non-sense should be welcomed, although I will miss the ability to do a one off wash sale transaction everyonce in a while b

  3. >This loophole has allowed crypto holders to generate tax losses (without
    economically realizing a loss) and artificially reduce the tax bill.  

    God damn it!

    **First of all it is NOT a loophole. It is just the way it is. The wash sale rule should not even exist. It is a made up, unnatural, government rule designed to make you screw up.**

    Second, a loss is a loss and addition and subtraction is cumulative.

    If you buy at 5 and sell at 1, and then buy again at 1 and sell at 10, your result is the same: 10.

    With a wash sale rule you can only claim the loss if you did not sell and if you purchased the same asset greater than 30 days from the day of the sell.

    Not having a wash sale rule allows you farm losses **if you do not sell the second buy.** But eventually you probably will sell, which means you could have a gain that will wipe out the previous loss. Thus you will be claiming a capital gain and paying your tax anyway.

    Do the math. The only thing a wash sale rule does is make it more complicated to trade, while at the time it forces some people to sell by year end. They can still farm the loss, so it does not prevent that. It only disrupts markets buy-timing and discourages trading. The exchanges should be against this.

    Shehan Chandrasekera needs to get his head straight. The very thought that a wash sale should exist in the first place is proof that this guy is an idiot. This guy is a gaslighting fucktard.

    To say that because crypto does not have a wash sale rule it is a loophole is like saying that when you buy a **pair** of shoes for **one** price is a loophole. He probably thinks that there should be two prices for two shoes.

    Is there a wash sale rule for real estate? No. There should not be one for crypto and there should not be one for other securities either. It is a perversion of reality and only exist for the sole purpose of a gotcha!

  4. Honestly this is great to maybe remove some day traders but I liked creating artificial losses for my taxes lol sold all my crypto that had losses on the last dip and rebought. Taxes shouldn’t be bad next year since I’m not planning on taking profit before 12/31

  5. If it didn’t kill day trading in equities that are already under the same rule then there is no reason to suppose it will kill day trading in crypto. But it will probably reduce day trading by the more marginal traders, reducing trading activity and the volatility they help drive. That sounds like a step in the right direction to me.

  6. The fact you can pay taxes on a $5 mil gain year, then lose $4 mil the next year and they let you write off $3k worth is outright theft. Hell, shouldn’t that $3k number at least go up with inflation? It’s been the same fucking number since I was a kid

What do you think?

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