As the price of bitcoin falls, you can Leverage this tax ‘Loophole,’ Experts Say

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

Following a post-election rallyThe flagship digital currency touched $ 109,000 on inauguration day Before Falling in February. As of medday Friday, the price was Around $ 84,000, after Dipping Below $ 80,000 overnightAccording to coin metrics.

The latest selloff presents a tax planning options, including a “Loophole” That Cold Go Away AMID Congressional tax negotiationsAccording to Andrew Gordon, A Tax Attorney, Certified Public Accountant and President of Gordon Law Group.

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The strategy, Known as “Tax-Loss harvesting. Carry Excess Losses Into Future Years.

Some Investors Wait Until December for Tax-Loss Harvesting, Which Can Be a Mistake BeCause Asset Volatily, Particularly for Digital Currency, Happens Throughout the Year, Experts.

“You should look for these Oportunities Continually and take advantage of them as they Occur,” Gordon Said.

When Selling Investments, there’s a wash sale ruleWhich Blocks You from Claiming a loss if you repurchase a “substantily identifily” asset within a 30-day window before or after the sala.

But currently, the wash sale rule Doesn’st Apply to CryptocurrencyWhich 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 extramely effective strategy for Crypto Investors BeCause they do’t to have to exit their position.”

However, the strategy could disappear in the future as Congress Donald Trump‘s tax ageda.

Sens. Cynthia lummis, r-wyo. And kirsten gillibrand, dn.y., in 2023 reintroduced a regulatory framework for cryptocurrencyWhich 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. Previous Told CNBC,

Of course, you should always consider your investment Goals and Timeline Before Implementing The Tax Strategy.