NFTcent
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If you bought crypto, a memecoin, or an NFT this year or last year and it’s down, U.S. tax rules currently allow you to sell it, realize the loss, and buy it right back.
Example. You bought a memecoin or an NFT for $50k and it’s now worth $25k. You can sell it, claim a $25k capital loss on this year’s taxes, and immediately repurchase the same asset with no wash sale penalty.
This is called tax loss harvesting. It’s currently allowed because crypto is classified as property, not a security. With stocks, doing this would trigger a wash sale and require a 30 day wait before buying back.
This is one reason you see increased selling toward year end when assets are underwater. The tradeoff is that if you were holding the asset for over a year, selling resets the long term capital gains clock when you eventually sell for a profit.
Most crypto tax software already shows which assets can be sold for tax loss harvesting. If you choose not to do it this year, you can still do it in a future year if prices remain depressed.
For example, if certain my @BoredApeYC NFTs remain well below prior purchase prices, they can be sold in the future to realize losses that offset gains from other investments. Think of it as keeping tax losses in reserve for a rainy day.
davie satoshi@NFTdavie
For those who don’t know U.S. tax rules. Crypto is not subject to wash sale rules like stocks. You can sell at a loss and buy it right back to harvest taxes with no 30 day wait. This contributes to year end selling pressure, especially in weaker coins.
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@thepropgallery 🙌🏼
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@NathanHeadPhoto 0% chance. And why are they waiting so long? Crypto has had a great year.
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