00:00No, the wash sale rule does not currently apply to crypto in the U.S.
00:04Under IRC Section 1091, the rule only restricts losses on stock or securities.
00:10Since IRS Notice 2014-21 classifies cryptocurrency as property,
00:16direct crypto sales fall outside its scope as of mid-2026.
00:21Key Distinctions by Context
00:221. Direct Crypto Holdings
00:25BTC, ETH, Altcoins
00:27No. 30-day restriction exists.
00:30You can sell at a loss and repurchase the same asset minutes later while still claiming the capital loss,
00:36since property isn't substantially identical security under the statute.
00:412. Crypto ETFs
00:43E.g. Spot Bitcoin ETFs like IBIT
00:46These are securities, so Section 1091 fully applies.
00:50Selling an ETF share at a loss and rebuying within 30 days before slash after disallows the loss,
00:56identical to stock treatment.
00:583. Crypto-related equities
01:00Mining companies exchange stocks like coin, also standard securities, fully subject to the wash sale rule.
01:07This answer changes by jurisdiction.
01:10Outside the U.S., rules differ.
01:12The U.K.'s HMRC applies same-day and 30-day bed-in banking, matching rules to crypto assets for capital
01:19gains tax,
01:20meaning a U.K. holder who sells and rebuys the same token within 30 days does face a real 30
01:26-day constraint,
01:27unlike U.S. taxpayers.
01:29It also changes by timing.
01:31Legislative proposals, including a 2025 Senate digital asset tax bill and a December 2025 bipartisan House discussion draft,
01:40aimed to close this loophole with retroactive application to tax years beginning after 2025 discussed in at least one draft.
01:48As of the third quarter of 2026, none has been enacted, but this is an active, unsettled area.
01:55Treat any confirmed 2026 effective date claims with skepticism unless verified against final IRS guidance.
02:03Practical takeaway
02:04U.S. holders of spot crypto can currently harvest losses and rebuy immediately,
02:09but should document trades to satisfy the economic substance doctrine.
02:13A brief holding gap strengthens this.
02:16Avoid applying the same logic to crypto ETFs or crypto stocks and monitor pending legislation before assuming this treatment persists
02:24into 2027.
02:25Non-U.S. users must check local rules, since the U.S. property classification doesn't transfer internationally.
02:33Finally, remember that everything we discussed today is for educational purposes only and does not constitute financial advice.
02:40Good luck to everyone and see you in the next video.
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