Crypto Tax Loss Harvesting Calculator
Calculate Your Tax Savings
Enter your current crypto gains and losses to see how much you can save on your tax bill using tax loss harvesting.
Your Potential Tax Savings
Save Money!Net Gain/Loss:
Tax Savings:
Available for Income Deduction:
Carry Forward:
With a 15% capital gains tax rate:
Each $100 of losses cancels $100 of gains, saving $15 in taxes.
Every year, thousands of crypto investors pay way more in taxes than they need to-simply because they didn’t know they could sell their losing coins to cut their tax bill. It’s not magic. It’s not a loophole. It’s tax loss harvesting, and it’s one of the most powerful tools in your crypto tax toolkit.
Here’s how it works: you own Bitcoin that you bought for $30,000. It’s now worth $18,000. You also sold Ethereum last month for a $12,000 profit. Instead of paying tax on that gain, you sell your underperforming Bitcoin. That $12,000 loss cancels out your $12,000 gain. Your tax bill drops to $0. And you can buy Bitcoin back the very next day-no waiting.
This isn’t theoretical. It’s happening right now, every day, by people who track their trades. And if you’re holding crypto that’s down from what you paid, you’re leaving money on the table if you don’t use it.
How Tax Loss Harvesting Actually Works in Crypto
Tax loss harvesting is simple in concept: sell an asset at a loss to offset a gain. But crypto makes it easier than stocks. In traditional markets, the IRS blocks you from selling a stock and buying it back within 30 days. That’s the wash sale rule. Crypto? No such rule-at least not yet.
So here’s your step-by-step:
- Find your realized capital gains from selling, swapping, or spending crypto in the current year.
- Look through your portfolio for coins that are worth less than what you paid for them.
- Sell those losing positions. The difference between your purchase price and sale price becomes your capital loss.
- Use that loss to cancel out your gains dollar-for-dollar.
- If your losses exceed your gains, you can deduct up to $3,000 from your ordinary income (like wages or side hustle earnings).
- Any leftover losses? Carry them forward to next year-no expiration date.
- Buy back the same crypto after 24 hours. Your cost basis resets, but your portfolio stays intact.
Example: You made $15,000 in gains from trading Solana and Cardano. You also have $18,000 in unrealized losses on Avalanche and Chainlink. Sell those two losing coins. You now have $3,000 in net losses. That $3,000 reduces your taxable income. You save roughly $900 in taxes (assuming a 30% tax rate). And you can buy Avalanche back tomorrow. Your exposure didn’t change. Your tax bill did.
Why Crypto Makes This Strategy So Powerful
The volatility of crypto is a curse for some. For tax strategists, it’s a gift.
When Bitcoin drops 40% in a month, you don’t just lose money-you gain a tax advantage. Every dip creates an opportunity. In 2022, when crypto markets crashed, investors who harvested losses saved millions collectively. In 2024, when prices recovered, those same investors were back in position, with lower tax bills and unchanged holdings.
Compare that to stocks. If you sell Apple at a loss, you can’t buy it back for 30 days. You risk missing a rebound. With crypto, you can sell at a loss on December 15 and buy back on December 16. No gap. No risk. Just savings.
That’s why tax professionals like Gordon Law Group have been advising clients on this since 2014. It’s legal. It’s documented. And it’s used by savvy investors who treat taxes like a puzzle to solve-not a bill to pay.
What You Can Offset With Crypto Losses
Not all losses are created equal. Here’s exactly what you can use them for:
- Offset capital gains-first priority. Every dollar of loss cancels a dollar of gain. No limit.
- Offset up to $3,000 of ordinary income-if your losses exceed your gains, this is your next move. That’s $3,000 off your salary, freelance income, or side hustle earnings.
- Carry forward unused losses-if you had $10,000 in losses and only $5,000 in gains, you can use the remaining $5,000 next year. And the year after that. And so on. There’s no time limit.
Let’s say you made $20,000 in crypto gains this year and lost $25,000 across other holdings. You cancel the $20,000 gain. You deduct $3,000 from your salary. You carry forward $2,000 to next year. Your tax bill? $0 this year. And you’ve got a $2,000 credit ready to use when you make gains next year.
Tools That Make This Easy (And Accurate)
Doing this manually? You’re asking for trouble. Crypto wallets, exchanges, DeFi protocols, NFT sales-they all generate transactions. Tracking them by hand is impossible.
That’s why tools like Koinly and CoinLedger exist. These platforms connect to your wallets and exchanges, automatically tag your buys and sells, calculate your gains and losses, and flag harvesting opportunities.
Here’s what they do for you:
- Import all your transactions from Coinbase, Kraken, MetaMask, etc.
- Calculate your cost basis using FIFO, LIFO, or specific identification (you choose the method).
- Generate a Tax Loss Harvesting report showing which assets you can sell to offset gains.
- Export a ready-to-file tax form (like Form 8949 and Schedule D).
Important: These tools only show you opportunities for the current tax year. If you’re filing your 2025 taxes, you can only harvest losses from trades made in 2025. You can’t go back and fix 2024 after December 31. Timing matters.
What Happens If You Don’t Harvest Losses?
Let’s say you held Bitcoin through 2022’s crash. You bought at $45,000. It dropped to $16,000. You didn’t sell. You just waited.
In 2023, Bitcoin bounced back to $40,000. You sold. You paid tax on $24,000 in gains. You missed the chance to lock in a $29,000 loss that could’ve wiped out multiple years of gains.
That’s the cost of doing nothing. You’re not just losing money on price-you’re losing money on taxes.
Worse, if you’re consistently selling winners but never selling losers, you’re building a tax liability that compounds over time. By 2025, you might owe thousands just because you never took the loss.
Common Mistakes to Avoid
Even smart people mess this up. Here are the top errors:
- Forgetting to track cost basis-If you bought Bitcoin in 2017 for $500 and again in 2021 for $40,000, you need to know which one you’re selling. Use specific identification, not just FIFO.
- Selling and buying back too fast-While wash sales don’t apply to crypto, some investors panic and rebuy within minutes. That’s fine, but make sure your exchange records show the sale and repurchase as separate events.
- Ignoring DeFi and swaps-Trading ETH for UNI on Uniswap counts as a taxable event. So does staking rewards. Your tax software needs to see all of it.
- Waiting until December 31-Don’t wait until the last week of the year. Markets move fast. If you spot a loss in October, act. Don’t hope it gets worse.
- Thinking you need to sell everything-You don’t have to liquidate your portfolio. Just sell the losers that offset your gains. Keep the rest.
What’s Next? Regulatory Risk and the Future
Right now, crypto tax loss harvesting works because the IRS hasn’t applied wash sale rules to digital assets. But that could change.
Some lawmakers have proposed extending stock-style wash sale rules to crypto. If that happens, you’d have to wait 30 days before repurchasing the same coin. That would make the strategy less flexible-but not useless.
Even if wash sale rules arrive, you can still harvest losses. You’d just need to swap into a similar asset (like selling Bitcoin and buying Ethereum) and wait. Or use a different exchange. The core idea-offsetting gains with losses-will always be valid.
The real threat isn’t the rule change. It’s ignorance. The people who lose out aren’t the ones who follow the rules. They’re the ones who never learned the rules existed.
What You Should Do Right Now
It’s November 26, 2025. You still have time.
Here’s your action plan:
- Log into your crypto tax software (Koinly, CoinLedger, or similar).
- Run your Tax Loss Harvesting report.
- Look for assets with losses greater than $1,000.
- Match those losses to any gains you’ve already realized this year.
- If you have net gains, sell the losing assets before December 31.
- Buy them back after 24 hours.
- Export your tax report and give it to your accountant.
If you don’t use software, start now. Even a spreadsheet with dates, amounts, and prices will help. But don’t wait until January.
This isn’t about gambling. It’s about math. It’s about using the law to your advantage. And if you’ve got crypto that’s underwater, you owe it to yourself to take the loss-and the savings.
Is tax loss harvesting with crypto legal?
Yes, it’s completely legal. The IRS allows capital losses to offset capital gains. Crypto investors have used this strategy since at least 2014, and tax firms like Gordon Law Group have formalized the process. As long as you report the transactions accurately and don’t falsify records, you’re compliant.
Can I buy back the same crypto right after selling it?
Yes. Unlike stocks, there’s no wash sale rule for cryptocurrency as of 2025. You can sell Bitcoin at a loss and buy it back the next day. The IRS hasn’t extended the 30-day wash sale rule to crypto assets. Just make sure your exchange records show two separate transactions.
What if I have more losses than gains?
You can deduct up to $3,000 of net capital losses from your ordinary income each year (like wages or freelance earnings). Any losses beyond that can be carried forward to future tax years indefinitely. There’s no expiration date.
Do I need to report every single crypto trade?
Yes. Every time you sell, swap, or spend crypto, it’s a taxable event-even if you didn’t convert to fiat. Trading ETH for SOL counts. Buying a pizza with Bitcoin counts. You must track every transaction and report gains and losses on Form 8949 and Schedule D.
Can I harvest losses from DeFi or NFTs?
Absolutely. Selling an NFT at a loss, unwinding a liquidity pool position, or swapping tokens on a DEX all create taxable events. If you lost money on any of these, you can use that loss to offset gains from other crypto trades. Your tax software should capture these if connected to your wallet.
What happens if I don’t harvest losses this year?
You lose the opportunity to reduce your 2025 tax bill. Unrealized losses don’t count-only realized ones do. If you don’t sell, you don’t get the deduction. You can still carry forward losses from prior years, but you’ll miss out on this year’s savings. Don’t wait until December.
Ian Esche
November 27, 2025 AT 00:27Bro, I sold my shitcoin portfolio in October and harvested $18k in losses. Bought everything back the next day. My tax guy is now my best friend. Saved me like $5k. Crypto is the only asset class where you can literally turn your losses into cash. Stop crying about the dip - use it. 🚀
Felicia Sue Lynn
November 27, 2025 AT 13:26While the mechanics of tax loss harvesting are technically sound, one must consider the ethical dimension of exploiting regulatory gray areas. The IRS has not yet codified wash sale rules for crypto not because it is inherently different, but because it is still catching up. To treat this as a tactical advantage rather than a moral compromise risks normalizing opportunism over stewardship. We are not merely investors - we are participants in a nascent financial ecosystem that deserves thoughtful governance, not loopholes.
Christina Oneviane
November 29, 2025 AT 07:51Oh wow, so now we’re all financial wizards because we can sell Bitcoin and buy it back the next day? Congrats, you just turned your portfolio into a tax spreadsheet. Next you’ll be filing Form 8949 in cursive. 💀
Casey Meehan
November 30, 2025 AT 04:29YOOOO I just used Koinly and it flagged 3 coins I forgot I even owned 😱 Lost $7k on Shiba Inu from 2021? SELL. Bought it back 2 hours later? 🤯 My tax bill dropped from $8k to $1.2k. Also, my dog now has a crypto wallet. He’s holding PEPE. He’s doing better than my ex. 🐶💸
Tom MacDermott
December 1, 2025 AT 08:29Everyone’s acting like this is some genius insight. Newsflash: this is basic finance. You’re just now realizing you can use losses to offset gains? Meanwhile, I’ve been doing this since 2017 - and I didn’t need a fucking app to tell me. Also, the fact that you’re all celebrating this like it’s a hack says everything about how little you know about real investing. You’re not strategists. You’re gamblers with spreadsheets. And don’t get me started on ‘buying back after 24 hours’ - that’s not smart, it’s just lazy. Do you even know what your cost basis is? Or are you just clicking ‘sell’ and hoping for the best? 🤡
Susan Dugan
December 2, 2025 AT 04:57Guys, I was skeptical at first - but after I harvested $12k in losses last month and used it to wipe out my Solana gains, I felt like I just unlocked a secret level in life. 💫 I didn’t sell my long-term HODLs - just the underperformers. Koinly made it stupid easy. I even used the $3k deduction to pay for my kid’s tutoring. That’s not tax evasion - that’s smart parenting. And if you’re still waiting until December? Baby, the market doesn’t pause for your procrastination. Go check your wallet right now. Find one coin that’s underwater. Sell it. Breathe. Then buy it back. You’ll thank yourself in April. 🙌
SHIVA SHANKAR PAMUNDALAR
December 3, 2025 AT 13:48Why are you all so obsessed with taxes? In India, we don't even track crypto gains because the government doesn't care. You Americans treat money like a religion. You pray to the IRS. You sacrifice your gains on the altar of compliance. Meanwhile, I bought Dogecoin in 2020 for $0.001 and now it's $0.0008. I still hold it. Why? Because life is not a spreadsheet. You think you're winning by saving $5k? You're just trading freedom for paperwork. The real win is not caring at all. 🤷♂️