Since cryptocurrencies are generally classified as property, wash sale regulations should not currently be a concern for investors. This means investors can sell an investment to realize a tax loss, only to buy it back immediately thereafter at a bargain. Today, wash sales only apply to stocks and securities, so traders are operating in a gray area for now until further IRS clarification is issued.
Since cryptocurrencies have not been labeled a stock or security, the IRS can only tax traders for non-economic substance transactions under property rules. These transactions are similar to wash sales, considering the volatility of crypto markets and the potential argument that investors made late trades in response to market-moving news as opposed to tax motivations, traders have a legitimate position on the matter.
Camuso CPA PLLC offers comprehensive services to develop and tailor a first-rate tax plan for your business needs. Reach out to our team regarding any questions about Cryptocurrencies or establishing a comprehensive tax plan. Few other forms are offering their services for cryptocurrency taxes in Charlotte; give us a call and get a licensed CPA in your corner.
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