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Bitcoin tax loss harvesting
A unique opportunity for U.S. bitcoin investors;
reduce tax obligations while maintaining your bitcoin position.
Estimate which bitcoin lots may be worth harvesting using our Tax Loss Harvesting Calculator.
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This calculator is for educational purposes only and does not provide tax, legal, or financial advice. Estimates use 2026 federal brackets and simplified state rates. Consult a qualified professional before making tax-loss harvesting decisions.
Bitcoin tax loss harvesting: explained
Tax loss harvesting is a strategy for investors to realize capital losses while still retaining their bitcoin postition.
How it works:
- 1
Find underwater bitcoin lots
Purchases where the current price is below your original cost basis.
- 2
Sell underwater lots to realize losses
Each sale creates a taxable event and records the capital loss.
- 3
Use the loss strategically
Losses can offset capital gains, reduce taxable income, or carry forward.
- 4
Repurchase the bitcoin
If you wish to maintain your prior bitcoin position.
- 5
Keep complete records
Track purchase dates, sale dates, cost basis, fees, and wallet activity.
A unique opportunity for U.S. bitcoin investors
The wash-sale limitation in IRC §1091 applies to "stock or securities."
The IRS currently classifies bitcoin as property.
Source: IRS Digital Assets Overview
This means you can sell and repurchase bitcoin without wash-sale restrictions.
| Traditional stocks | Bitcoin |
|---|---|
| Wash sale rule applies | No wash sale restrictions |
| Must wait 30 days to repurchase | Immediate repurchase allowed |
| Risk missing price recovery | Maintain full market exposure |
Real bitcoin, not bitcoin exposure
Loss harvesting strategies apply to direct bitcoin ownership.
- You file taxes as a United States taxpayer
- You own bitcoin that was purchased above the current market price
- Your bitcoin is held in a self-custody wallet or exchange account
- Your bitcoin lots have clear purchase dates and cost basis
Bitcoin ETFs, trusts, mining stocks, futures funds, and other bitcoin-linked securities are different and should be evaluated under traditional securities wash-sale rules.
Frequently asked questions
Ready for the next step?
Speak with an Executive Bitcoin Advisor
We can help you turn an unrealized loss into a tax-smart move while still keeping your bitcoin position intact.
This page is for informational purposes only. Bitcoin Well is not responsible for any tax liabilities, penalties, or interest charges resulting from your use of this information. The IRS has not reviewed or endorsed this content. We make no warranties about the accuracy, completeness, or reliability of the tax information provided. Always consult with a qualified professional before making tax decisions.
The information provided represents our understanding of current federal tax rules as they apply to bitcoin. We are not tax professionals and this content does not constitute tax, legal, or financial advice. Tax laws change frequently and vary by individual circumstances. State and local taxes may apply differently. Your specific situation may require different treatment than described here.