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The Silver Linings Playbook For Cryptocurrency Losses

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Crypto investors have an unusually good opportunity to harvest their tax losses by the end of 2023.

Crypto tax-loss harvesting is a strategy that involves selling crypto assets at a loss to offset capital gains from other assets, thus reducing your tax liability.

Cryptocurrencies are capital assets, which means realizing a loss on a crypto asset owned for a year or longer fully offsets a long-term capital gain; realizing a $1 crypto loss wipes out $1 of capital gains taxes that would otherwise be owed. Crypto losses are realized only after they are sold.

Prices on stocks, homes, and other capital gain assets up sharply in 2023 and the economy growing much faster than expected, realizing cryptocurrency losses and writing them off against capital gains on stocks, real estate, private investments, or other capital assets is a silver linings playbook for putting a cryptocurrency loss behind you in the best way possible.

In addition, investors are permitted to buy back crypto assets at a lower price after harvesting the losses without triggering the “wash-sale” rule, which forbids buying a substantially identical investment 30 days before or after selling it and realizing a tax loss.

The silver linings playbook for cryptocurrency losses requires careful attention before the end of 2023 to a highly technical topic where expert tax advice often is best.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.

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This article was written by a professional financial journalist for Responsive Financial Group, Inc and is not intended as legal or investment advice.

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