This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above and get some free Bitcoin - up to $3600 worth. PHEMEX is also celebrating their two year anniversary by sharing 2 BTC with 10 lucky winners to help them realize their dreams: https://anniversary.phemex.com/#dream-sectionAs much as we want answers around crypto regulation, there is a loophole in our space due to a lack of clarity that we can legally take advantage of to stick it to the man. It’s called tax-loss harvesting. Wealthy crypto investors have secretly been doing it for a long time and you can too (for now).This is a hidden advantage only available to our space that is seriously worth considering depending on your current investment strategies and positions. In traditional finance, there are parameters in place to prevent traders and investors from selling losing positions and instantly buying them back. It’s called triggering a wash sale.Wash selling a losing position is bad because you can no longer write off that loss. But what’s great about crypto currently is that there are no wash sales. The concept simply doesn’t exist.Let’s look at a clear definition from Investopedia:The wash-sale rule is an Internal Revenue Service (IRS) regulation established to prevent a taxpayer from taking a tax deduction for a security sold in a wash sale. The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss and, within 30 days before or after this sale, buys a “substantially identical” stock or security, or acquires a contract or option to do so. A wash sale also results if an individual sells a security, and the individual’s spouse or a company controlled by the individual buys a substantially equivalent security.What this means is that if you have positions that are underwater, you can exit them and potentially improve your tax situation. If you are not particularly married to the position, you can sell today, take the write-off, and move on to better investments or trades. If you do still like the position, you can also buy it right back. No harm, no foul. You take the tax write off for the loss, lower your cost basis and start again with the same coins.I am not a tax expert, so nothing I write should be taken as advice. If you do plan on doing anything, you should only take advice from an expert. The one thing I can advise is that if you do this, you need to keep perfect records of your transactions if you plan to report the loss to the IRS - they will not do this for you.What is great about these losses is that they can be accrued and carried over the years to offset future gains. Keep in mind that if you opt in to this strategy, you forfeit long-term capital gains advantages. Before you decide on this, you need to understand what type of investor you are so that your tax strategy best matches what you do on a day-to-day basis. This loophole won’t last forever and it may be the last year investors have this opportunity. If you want to read more about this topic, I found a good article HERE that you can refer to.Also, people constantly ask me what service I use for my taxes. I have gone through almost every single platform in the space, which all have pros and cons. I have settled on ZenLedger. The platform is amazing and they helped me tremendously in getting my taxes squared away last year. In This Issue:Tax Loss Harvesting 101Bitcoin Thoughts And AnalysisAltcoin ChartsBitcoin’s Institutionalization - IntoTheBlockDonald Trump Despises CryptoTwitter Drama Is BoilingSBF Discusses RegulationThe Wolf Of All Streets Podcast Ft. Matthew HouganMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO
The Wolf Den #398 - Tax Loss Harvesting 101
The Wolf Den #398 - Tax Loss Harvesting 101
The Wolf Den #398 - Tax Loss Harvesting 101
This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above and get some free Bitcoin - up to $3600 worth. PHEMEX is also celebrating their two year anniversary by sharing 2 BTC with 10 lucky winners to help them realize their dreams: https://anniversary.phemex.com/#dream-sectionAs much as we want answers around crypto regulation, there is a loophole in our space due to a lack of clarity that we can legally take advantage of to stick it to the man. It’s called tax-loss harvesting. Wealthy crypto investors have secretly been doing it for a long time and you can too (for now).This is a hidden advantage only available to our space that is seriously worth considering depending on your current investment strategies and positions. In traditional finance, there are parameters in place to prevent traders and investors from selling losing positions and instantly buying them back. It’s called triggering a wash sale.Wash selling a losing position is bad because you can no longer write off that loss. But what’s great about crypto currently is that there are no wash sales. The concept simply doesn’t exist.Let’s look at a clear definition from Investopedia:The wash-sale rule is an Internal Revenue Service (IRS) regulation established to prevent a taxpayer from taking a tax deduction for a security sold in a wash sale. The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss and, within 30 days before or after this sale, buys a “substantially identical” stock or security, or acquires a contract or option to do so. A wash sale also results if an individual sells a security, and the individual’s spouse or a company controlled by the individual buys a substantially equivalent security.What this means is that if you have positions that are underwater, you can exit them and potentially improve your tax situation. If you are not particularly married to the position, you can sell today, take the write-off, and move on to better investments or trades. If you do still like the position, you can also buy it right back. No harm, no foul. You take the tax write off for the loss, lower your cost basis and start again with the same coins.I am not a tax expert, so nothing I write should be taken as advice. If you do plan on doing anything, you should only take advice from an expert. The one thing I can advise is that if you do this, you need to keep perfect records of your transactions if you plan to report the loss to the IRS - they will not do this for you.What is great about these losses is that they can be accrued and carried over the years to offset future gains. Keep in mind that if you opt in to this strategy, you forfeit long-term capital gains advantages. Before you decide on this, you need to understand what type of investor you are so that your tax strategy best matches what you do on a day-to-day basis. This loophole won’t last forever and it may be the last year investors have this opportunity. If you want to read more about this topic, I found a good article HERE that you can refer to.Also, people constantly ask me what service I use for my taxes. I have gone through almost every single platform in the space, which all have pros and cons. I have settled on ZenLedger. The platform is amazing and they helped me tremendously in getting my taxes squared away last year. In This Issue:Tax Loss Harvesting 101Bitcoin Thoughts And AnalysisAltcoin ChartsBitcoin’s Institutionalization - IntoTheBlockDonald Trump Despises CryptoTwitter Drama Is BoilingSBF Discusses RegulationThe Wolf Of All Streets Podcast Ft. Matthew HouganMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO