Crypto currencies including Bitcoin and NFTs are mostly down this year. Are you holding cryptocurrencies or NFTs that have lost value since you bought them? If so, then you are sitting on unrealized losses. So it might be a good time to do some crypto tax loss harvesting to save on your 2025 federal income tax bill. Crypto tax loss harvesting is a way to avoid capital gains tax. You can sell specific assets at a loss in order to lower your tax bill.
Crypto tax loss harvesting allows you to:
- Bring your capital gains and the resulting taxes down to $0.
- Additionally offset earned income by up to $3,000.
- Carry losses forward to future years.
- And reset your cost basis for each.
Now with stocks and securities that are down, when you sell them at the end of the year to realize those losses, you are prohibited from buying them back for 30 days. This is known as the “wash sale rule” or “30-day rule.” But with cryptocurrencies and NFTs (which are deemed to be property, not securities by the IRS), there is no such restriction. You can buy your crypto assets right back after only 24 hours or on January 1, 2026 if you sold them on December 31, 2025.
The tax loss harvesting deadline is December 31st of each year. For more tax tips for inspectors visit our forum thread at: 2025 Year-End Tax Tips for Inspectors