Episode 40 - End of Year Tax Savings
Description
Reid Trego welcomes the audience to the Money Pig podcast, joined by Tim Goodwin, for a discussion on end-of-year planning.
Tax Tips:
There’s an extra benefit that cryptocurrency has over stocks and other conventional assets when selling at a loss. The IRS states that for tax purposes, virtual currency should be treated as property rather than as a capital asset, like a stock.
This is important because capital assets are subject to wash sale rules while property is not. (This is true as of Dec. 2023, but might be changing in the future)
Wash sale rules bar investors from artificially harvesting tax benefits by selling capital assets for a loss and then immediately repurchasing the same or a broadly similar asset within thirty days of the sale. Since crypto isn’t considered a capital asset, it’s not subject to the rule.
So, if you’ve got unrealized losses but want to hold your crypto long-term, you could sell your crypto positions, immediately repurchase them, and still be allowed to realize the loss on your taxes.
Remember, capital losses can offset capital gains and up to $3,000 of your income.
If you want help managing and investing your money, or just a second opinion on your retirement plan, one of our CFP® professional wealth advisors would love to discuss your individual goals and options with you. Please reach out by scheduling a free 20 minute intro call with our Goodwin Investment Advisory consultant here.