Close Menu
  • Home
  • Finance News
  • Personal Finance
  • Investing
  • Cards
    • Credit Cards
    • Debit
  • Insurance
  • Loans
  • Mortgage
  • More
    • Save Money
    • Banking
    • Taxes
    • Crime
What's Hot

How much does it cost to be in a sorority?

May 10, 2025

Fed rate decision May 2025: Fed holds rates steady

May 10, 2025

Vista Bank lays plans to buy in Texas, build in Florida

May 10, 2025
Facebook X (Twitter) Instagram
Facebook X (Twitter) Instagram
Smart SpendingSmart Spending
Subscribe
  • Home
  • Finance News
  • Personal Finance
  • Investing
  • Cards
    • Credit Cards
    • Debit
  • Insurance
  • Loans
  • Mortgage
  • More
    • Save Money
    • Banking
    • Taxes
    • Crime
Smart SpendingSmart Spending
Home»Finance News»As the price of bitcoin falls, you can leverage this tax loophole
Finance News

As the price of bitcoin falls, you can leverage this tax loophole

February 28, 2025No Comments3 Mins Read
Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
As the price of bitcoin falls, you can leverage this tax loophole
Share
Facebook Twitter LinkedIn Pinterest Email

Jaque Silva/ | Nurphoto | Getty Images

With the price of bitcoin down from a record high in January, there’s a chance for some investors to score a tax break, experts say.  

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.

The latest selloff presents a tax planning opportunity, including a “loophole” that could go away amid Congressional tax negotiations, according to Andrew Gordon, a tax attorney, certified public accountant and president of Gordon Law Group.

More from Personal Finance:
Americans are suffering from ‘sticker shock’ — how to adjust
You can still lower your 2024 tax bill or boost your refund
1 in 5 Americans are ‘doom spending’ — how that can backfire

The strategy, known as “tax-loss harvesting,” 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. 

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. 

“You should look for these opportunities continually and take advantage of them as they occur,” Gordon said.  

You should look for these opportunities continually and take advantage of them as they occur.

Andrew Gordon

President of Gordon Law Group

The crypto wash sale ‘loophole’ 

When selling investments, there’s a wash sale rule, which blocks you from claiming a loss if you repurchase a “substantially identical” asset within a 30-day window before or after the sale.

See also  How to set up direct deposit for your tax refund

But currently, the wash sale rule doesn’t apply to cryptocurrency, which can be beneficial for long-term digital currency investors, experts say.

“If you sell, for instance, bitcoin at a loss today and then buy it back tomorrow, you still have your loss on the books,” Gordon said. “This is an extremely effective strategy for crypto investors because they don’t have to exit their position.”

However, the strategy could disappear in the future as Congressional Republicans seek ways to fund President Donald Trump’s tax agenda.

Sens. Cynthia Lummis, R-Wyo. and Kirsten Gillibrand, D-N.Y., in 2023 reintroduced a regulatory framework for cryptocurrency, which included closing the crypto wash sale loophole. Former President Joe Biden’s fiscal year 2025 budget also included the proposal.

In the meantime, “the IRS gives us this loophole. We may as well take it,” Adam Markowitz, an enrolled agent at Luminary Tax Advisors in Windermere, Florida, previously told CNBC.

Of course, you should always consider your investing goals and timeline before implementing the tax strategy.

Source link

Bitcoin falls leverage loophole Price Tax
Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
Previous ArticleMastercard’s U.S. fee settlement is approved | PaymentsSource
Next Article The 25 Most Expensive ZIP Codes In Minnesota, Revealed By Zillow Data

Related Posts

Fed rate decision May 2025: Fed holds rates steady

May 10, 2025

What To Do After Graduation

May 10, 2025

2025 Student Loan Interest Rates Stay Painfully High; Borrowers Get No Relief

May 10, 2025
Add A Comment
Leave A Reply Cancel Reply

Top Posts

Here’s how to pay for taxes on your Roth IRA conversion, advisors say

December 10, 2024

A third ex-TD Bank employee is charged in money-laundering scheme

December 12, 2024

Banks seek injunction to stop CFPB’s $5 overdraft rule

December 19, 2024
Ads Banner

Subscribe to Updates

Subscribe to Get the Latest Financial Tips and Insights Delivered to Your Inbox!

Stay informed with our finance blog! Get expert insights, money management tips, investment strategies, and the latest financial news to help you make smart financial decisions.

We're social. Connect with us:

Facebook X (Twitter) Instagram YouTube
Top Insights

How much does it cost to be in a sorority?

May 10, 2025

Fed rate decision May 2025: Fed holds rates steady

May 10, 2025

Vista Bank lays plans to buy in Texas, build in Florida

May 10, 2025
Get Informed

Subscribe to Updates

Subscribe to Get the Latest Financial Tips and Insights Delivered to Your Inbox!

© 2025 Smartspending.ai - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.