{"id":10965,"date":"2025-03-01T00:18:13","date_gmt":"2025-03-01T00:18:13","guid":{"rendered":"https:\/\/finderica.com\/?p=10965"},"modified":"2025-03-01T00:18:13","modified_gmt":"2025-03-01T00:18:13","slug":"as-the-price-of-bitcoin-falls-you-can-leverage-this-tax-loophole","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=10965","title":{"rendered":"As the price of bitcoin falls, you can leverage this tax loophole"},"content":{"rendered":"<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108081119\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Jaque Silva\/ | Nurphoto | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>With the price of <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\">bitcoin<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> down from a record high in January, there&#8217;s a chance for some investors to <a href=\"https:\/\/www.irs.gov\/taxtopics\/tc409\" target=\"_blank\" rel=\"noopener\">score a tax break<\/a>, experts say.\u00a0\u00a0<\/p>\n<p>Following a post-election rally, the flagship digital currency touched $109,000 on inauguration day before falling in February. As of midday Friday, the price was around $84,000, after dipping below $80,000 overnight, according to Coin Metrics.<\/p>\n<p>The latest selloff presents a tax planning opportunity, including a &#8220;loophole&#8221; that could go away amid Congressional tax negotiations, according to Andrew Gordon, a tax attorney, certified public accountant and president of Gordon Law Group.<\/p>\n<p><strong>More from Personal Finance:<\/strong><br \/>Americans are suffering from &#8216;sticker shock&#8217; \u2014 how to adjust<br \/>You can still lower your 2024 tax bill or boost your refund <br \/>1 in 5 Americans are &#8216;doom spending&#8217; \u2014 how that can backfire<\/p>\n<\/div>\n<div class=\"group\">\n<p>The strategy, known as &#8220;tax-loss harvesting,&#8221; allows you to offset profitable investments by selling declining assets in a brokerage or other taxable account. Once your losses exceed gains, you can subtract up to $3,000 per year from regular income and carry excess losses into future years.\u00a0<\/p>\n<p>Some investors wait until December for tax-loss harvesting, which can be a mistake because asset volatility, particularly for digital currency, happens throughout the year, experts say.\u00a0<\/p>\n<p>&#8220;You should look for these opportunities continually and take advantage of them as they occur,&#8221; Gordon said.\u00a0\u00a0<\/p>\n<\/div>\n<blockquote data-test=\"Pullquote\">\n<div class=\"Pullquote-pullquote\" style=\"border-top-color:#002f6c\">\n<div>\n<p>You should look for these opportunities continually and take advantage of them as they occur.<\/p>\n<div class=\"Pullquote-sourceWrapper\">\n<p>Andrew Gordon<\/p>\n<p>President of Gordon Law Group<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n<h2 class=\"ArticleBody-subtitle\"><a id=\"headline0\"><\/a>The crypto wash sale &#8216;loophole&#8217;\u00a0<\/h2>\n<div class=\"group\">\n<p>When selling investments, there&#8217;s a\u00a0wash sale rule, which blocks you from claiming a loss if you repurchase a &#8220;substantially identical&#8221; asset within a 30-day window before or after the sale.<\/p>\n<p>But currently, the wash sale rule doesn&#8217;t apply to cryptocurrency, which can be beneficial for long-term digital currency investors, experts say.<\/p>\n<p>&#8220;If you sell, for instance, bitcoin at a loss today and then buy it back tomorrow, you still have your loss on the books,&#8221; Gordon said. &#8220;This is an extremely effective strategy for crypto investors because they don&#8217;t have to exit their position.&#8221;<\/p>\n<\/div>\n<div class=\"group\">\n<p>However, the strategy could disappear in the future as Congressional Republicans seek ways to fund President Donald Trump&#8217;s tax agenda. <\/p>\n<p>Sens. Cynthia Lummis, R-Wyo. and Kirsten Gillibrand, D-N.Y., in 2023 reintroduced a <a href=\"https:\/\/www.gillibrand.senate.gov\/news\/press\/release\/lummis-gillibrand-reintroduce-comprehensive-legislation-to-create-regulatory-framework-for-crypto-assets\/\" target=\"_blank\" rel=\"noopener\">regulatory framework for cryptocurrency<\/a>, which included closing the crypto wash sale loophole. Former President Joe Biden&#8217;s fiscal year 2025 budget also <a href=\"https:\/\/www.whitehouse.gov\/wp-content\/uploads\/2024\/03\/budget_fy2025.pdf\" target=\"_blank\" rel=\"noopener\">included the proposal<\/a>.<\/p>\n<p>In the meantime, &#8220;the IRS gives us this loophole. We may as well take it,&#8221; Adam Markowitz, an enrolled agent at Luminary Tax Advisors in Windermere, Florida, previously told CNBC.<\/p>\n<p>Of course, you should always consider your investing goals and timeline before implementing the tax strategy.<\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-108082075\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-108082075\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000362584\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/www.cnbc.com\/2025\/02\/28\/price-of-bitcoin-tax-loophole.html\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jaque Silva\/ | Nurphoto | Getty Images With the price of bitcoin down from a record high in January, there&#8217;s a chance for some investors to score a tax break, experts say.\u00a0\u00a0 Following a post-election rally, the flagship digital currency touched $109,000 on inauguration day before falling in February. As of midday Friday, the price<\/p>\n","protected":false},"author":1,"featured_media":10966,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[1381,1542,1437,3842,1501,97],"class_list":{"0":"post-10965","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-bitcoin","9":"tag-falls","10":"tag-leverage","11":"tag-loophole","12":"tag-price","13":"tag-tax"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/10965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10965"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/10965\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/10966"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}