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Crypto & tax

Crypto Tax-Loss Harvesting Calculator

What realising a loss is worth this year — and what it quietly costs you in the year you finally sell.

InputsLOSS-20K
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Because crypto is property rather than a security, you can rebuy immediately — the 30-day wash-sale rule does not reach it on the current rules.

Tax saved this year$20,000 loss
$2,420
against short-term gains$8,000
against long-term gains$0
against income (capped at $3,000)$3,000
carried to future years$9,000
new cost basis
$30,000
future gain grows by
$20,000
marginal rate
22%

A $20,000 crypto loss, against $8,000 of short-term gains and $100,000 of other income, saves $2,420 in federal tax this year — $8,000 of it against the gains, $3,000 against ordinary income, and $9,000 carried forward. Because crypto is property rather than a security, you can rebuy the same token immediately instead of waiting 30 days.

It also resets your cost basis to $30,000, making a future gain $20,000 larger. Federal only, 2026 rules, before state tax.

Why crypto is different from stocks here

Section 1091 disallows a loss where you acquire “substantially identical stock or securities” within 30 days either side of the sale. The text is limited to stock and securities. The IRS treats virtual currency as property, not as a security — so the rule does not reach it.

The practical difference is exposure. A stock investor harvesting a loss has to be out of the position for 30 days and wear whatever the market does in that window, which can easily cost more than the tax saved. A crypto holder can sell and rebuy in the same minute, keeping the position while banking the loss.

This is current law, not permanent law. Extending wash-sale treatment to digital assets has been proposed in Congress more than once. Nothing here should be read as a prediction that it will still work in a future tax year.

Harvesting defers tax. It does not erase it.

Most harvesting calculators show you the saving and stop, which makes it look like free money. It is not, and the reason is mechanical: when you rebuy at the lower price, your cost basis resets down by exactly the loss you just claimed. Here that is $50,000 down to $30,000, which makes the gain on an eventual sale $20,000 larger — the same number as the loss, moved into the future.

What you actually gain is narrower than the headline, and worth stating plainly:

  • Use of the money in the meantime. Tax deferred is tax you can invest until it is due.
  • Rate arbitrage, if it goes your way. Saving at today’s ordinary rate and paying later at the long-term rate is a real gain. If your income rises instead, it works against you.
  • Converting a short-term gain into a long-term one, since the rebought position starts a new holding period.

The $3,000 wall

Losses offset capital gains without limit, but only $3,000 a year can be applied against ordinary income. Everything beyond that carries forward indefinitely.

For a large loss with no gains to absorb it, that is a long queue: a $100,000 loss with no capital gains takes over thirty years to use up at $3,000 a year. The carryforward never expires, but “never expires” and “useful soon” are different things — which is why the calculator shows the carryforward as its own line rather than folding it into the saving.

Once you sell

Realising the loss is a disposal like any other, so it needs the same cost-basis treatment as a sale at a profit. Work the disposal through FIFO, LIFO or HIFO to get the exact figure, since which lots you are treated as selling changes the loss. If some of your holdings arrived as rewards rather than purchases, their basis is the income you already declared.

Common questions

Does the wash-sale rule apply to crypto?
Not on the current rules. Section 1091 of the tax code disallows a loss when you buy back substantially identical "stock or securities" within 30 days, and its text is limited to stock and securities. The IRS treats virtual currency as property rather than as a security, so the rule does not reach it — which means you can realise a loss and rebuy the same token immediately. Congress has repeatedly proposed closing this, so treat it as current law rather than permanent law.
How much tax does harvesting a loss actually save?
It depends what the loss offsets. On a $20,000 loss against $8,000 of short-term gains with $100,000 of other income, it saves $2,420 this year: $8,000 against the gains at your ordinary rate, $3,000 against income, and $9,000 carried to future years.
Is there a limit on how much loss I can use?
Against capital gains, no — losses offset gains dollar for dollar. Against ordinary income, yes: $3,000 a year. Anything beyond that carries forward indefinitely, so a very large loss is not wasted, but it can take many years to actually use.
Is harvesting free money?
No, and this is the part most harvesting tools leave out. When you rebuy at the lower price your cost basis resets down by exactly the loss you claimed — here from $50,000 to $30,000 — so a future gain is $20,000 larger. Harvesting DEFERS tax rather than erasing it. What you gain is the use of the money in the meantime, plus any difference between the rate you save now and the rate you pay later, which can be negative if your income rises.
Do short-term and long-term losses work the same way?
They net differently. A loss offsets gains of its own character first — short against short, long against long — and only then crosses over. That ordering matters because short-term gains are taxed at ordinary rates and long-term gains at the lower capital gains rates, so a short-term loss used against a short-term gain is worth more than the same loss used against a long-term one.
Does this work for stocks too?
No, and that is the whole distinction. Sell a stock at a loss and rebuy within 30 days and the loss is disallowed — you must sit out the window and carry the market risk of being out of the position. The absence of that constraint is the only reason crypto harvesting is mechanically different.

How we calculate this

Losses net in the statutory order: against gains of the same character first, then across, then against ordinary income up to $3,000, with the remainder carried forward. The saving values each slice at the rate that slice was actually taxed at — ordinary rates for short-term gains and income, capital gains rates for long-term.

The basis reset is reported next to the saving, not hidden. A tool that shows only what you save is describing half of the transaction.

Full methodology & sources →

Where to go next

Realising a loss is a disposal like any other, so which lots you sell changes the figure. Run it through FIFO, LIFO or HIFO to get the exact loss.

For coins that arrived as staking, mining or airdrops rather than purchases, their basis is the income you already declared, not what you paid.

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Federal only; state treatment varies. Reflects current law on wash sales, which has been the subject of repeated legislative proposals. Models one position rather than a whole portfolio, and ignores transaction fees and spread, which eat into the saving on a real round trip. Estimates for general information only — not financial, tax, or investment advice.