Crypto wash sales: what the IRS rule says
The wash sale rule does not apply to cryptocurrency for US federal income tax. The IRS treats crypto as property, so a loss sale goes on Schedule D.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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The wash sale rule exists to stop investors from claiming a tax loss on a stock and buying it right back. Stocks and securities fall under that rule, and the IRS has a separate category for cryptocurrency.
Why crypto is not a security
The IRS treats cryptocurrency as property for federal income tax. Stocks and securities are a separate category, and the wash sale disallowance is written for that category. Because crypto is property, the disallowance does not reach it.
What rebuying does to your loss
A crypto loss sale followed by an immediate rebuy is not disallowed today. You do not have to wait before you buy the coin back to keep the loss. Keep records of both trades so you can show the dates and amounts.
Which IRS schedule reports the loss?
Where you report a loss depends on what you sold and how you held it. The table shows the common investment case.
Frequently asked questions
Usually yes. ETF shares are securities, so the wash sale rule can apply to those shares. The rule follows the shares, not the cryptocurrency the fund tracks.
The wallet does not matter for this rule. Moving a coin between wallets you control is not a sale, so no loss arises on that transfer.
It could. The wash sale rule is in a statute, so applying it to digital assets would likely take a new law. Lawmakers have proposed changes, but nothing is in force today.
The IRS treats digital assets broadly, and the wash sale rule names stocks and securities. Stablecoins and NFTs are usually not stocks or securities.
