OWNR Wallet
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What is the wash-sale rule, and does it apply to crypto?
The wash-sale rule is a tax regulation that prevents investors from claiming a tax loss when they sell a security and then purchase a "substantially identical" security within 30 days before or after the sale.
Established by the Internal Revenue Service (IRS) in the United States, the wash-sale rule mandates that if investors sell an investment at a loss and subsequently acquire a virtually identical security within the 30-day timeframe, they cannot deduct the loss from their taxes. Instead, the loss must be factored into the cost basis of the new security, which will either reduce their gain or increase their loss when they eventually sell the new asset.
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