Crypto Capital Losses: How to Offset Losses and Save on Taxes
When you sell cryptocurrency for less than you paid, you’ve realized a crypto capital loss, a tax-deductible loss from selling digital assets at a price below your purchase cost. This isn’t just a paper loss—it’s a legal tool that can reduce your taxable income, especially if you’ve made profits elsewhere in your portfolio. Many people don’t realize they can use these losses to cancel out gains from stocks, real estate, or even other crypto trades. In India, where crypto gains are taxed at 30%, turning a loss into a tax saving isn’t just smart—it’s essential.
Related to this are capital gains tax, the tax you pay when you sell an asset for more than you bought it, and tax loss harvesting, the strategy of selling losing assets to offset taxable gains. If you sold Bitcoin at a profit last year but lost money on Solana this year, you can use that Solana loss to reduce your overall tax bill. The IRS and Indian tax authorities treat crypto like property, not currency, so every sale triggers a taxable event—whether you made money or not. That’s why keeping records of every trade, including dates, amounts, and prices, isn’t optional. It’s your proof.
Not all losses are created equal. A loss on a token you held for less than a year counts as a short-term loss and can offset short-term gains first. Long-term losses (held over a year) are used after that. You can also carry forward unused losses to future years if your losses exceed your gains in a single year. But here’s the catch: you can’t just sell and rebuy the same coin right away to claim the loss. That’s called a wash sale, and while it’s not officially banned in India yet, tax authorities are watching. Smart traders wait at least 30 days before buying back in.
Some people think crypto losses don’t matter if they didn’t cash out. But that’s wrong. You only realize a loss when you sell, swap, or trade it for something else—even if you trade BTC for ETH. Every swap is a taxable event. If you bought ETH for ₹50,000 and traded it for BTC worth ₹40,000, you’ve got a ₹10,000 loss. That’s real. That’s deductible.
And it’s not just about reducing your tax bill. It’s about controlling your portfolio’s direction. Selling losers lets you reset your positions without paying extra tax. You can move money into stronger assets, rebalance your holdings, and still come out ahead on paper and on paper.
Below, you’ll find real guides on how crypto taxes work, what counts as a taxable event, and how to track your trades so you never miss a deduction. Whether you’re dealing with NFTs, stablecoins, or altcoins, the rules for losses stay the same. You don’t need to be an accountant to use them—you just need to know where to look.
Tax-Loss Harvesting in Crypto: How to Offset Gains and Lower Your Tax Bill
Learn how to use crypto tax-loss harvesting to legally offset capital gains, reduce your tax bill, and reset your cost basis-without giving up your investments. Works even if you still believe in the asset.
Categories
- Cryptocurrency
- Careers & Education
- hire domestic help in Mumbai
- Home & Living
- hire drivers in mumbai
- Home & Lifestyle
- Technology
- hire pet care in mumbai
- Travel & Transportation
- Health & Fitness