Crypto Tax-Loss Harvesting 2025: 9 Powerful Moves to Maximize Savings
Byline: Written by a U.S. tax-focused editor. Expert review: CPA/EA review scheduled. Last reviewed: 2025-10.
You can lower tax drag now without touching your core allocation. The fastest move is a rate-aware harvest with tidy paperwork—look at short- vs long-term brackets, the Net Investment Income Tax (NIIT) at 3.8%—which, when it applies, stacks on top of your bracket—and your state rate in one view.
This page gives you a precise calculator, a plain-English Specific-ID how-to, and jurisdiction rules for the U.S., UK, Canada, and Australia (IRS, 2025-08; HMRC, 2025-04; CRA, 2025-03). We’ll focus on harvesting, not reallocating; if your plan calls for rebalancing, handle that separately.
- Select lots on purpose (Specific ID): sell the loss lot and keep the low-basis winner; export your broker’s lot report as PDF/CSV.
- Match holding periods: aim short-term losses at short-term gains first; rates usually bite harder there.
- Model add-ons: if NIIT applies, include 3.8% and your state rate; avoid buybacks that trigger local matching rules.
- Document everything: save trade confirms, note your basis method, and clip the relevant rule date above.
Next action: open the calculator, enter your bracket, NIIT status, and state rate, then pick the exact lots to harvest today. If NIIT doesn’t apply this year, skip it and move on.
Table of Contents
Quick Estimator (U.S.-first, rate-aware)
Let’s make the tax hit honest: use your actual short-term and long-term rates, the 3.8% Net Investment Income Tax (if it applies), and your state bracket. If your income straddles a threshold, use the higher rate for a quick check and refine later.
How the math runs: losses offset gains in the same term first; then we net short-term against long-term; then any remaining loss—up to $3,000, or $1,500 if married filing separately—reduces ordinary income. Anything beyond that carries forward, which means today’s entry also shapes next year.
- Enter your ordinary (short-term) marginal rate and your long-term rate (0/15/20%).
- Toggle NIIT 3.8% if you’re over the threshold, and add your state rate—3.8% stacks, so the estimate can move.
- Test one position (amount + term). See the estimated tax change and any carryforward.
No storage. Next step: fill the fields below and run one position to calibrate your year-end plan.
NIIT (3.8%) can apply above income thresholds; toggle only if you expect to exceed them this year.
- Enter filing status and brackets.
- Pick the correct loss term.
- Save the result as your target.
Apply in 60 seconds: Estimate one coin, write the harvest dollar figure, and schedule the trade.
🔗 CP2000 Crypto 1099-DA Mismatch Posted 2025-10-15 13:31 UTC
How to use Specific-ID correctly (U.S.)
You want the tax result, not a paperwork fight. Let’s make the proof airtight and quick.
Bottom line: Specific Identification (“Specific-ID,” also called specific lot selection) works only if you can show the exact units sold; without contemporaneous proof, the IRS and many brokers default to FIFO. That’s the rule; the counterpoint is simple—clean records switch the default off.
60-second setup: build a simple “Trade Packet” before you click sell. We’re not banking on end-of-year statements or memory.
- Enable and choose lots. In your broker/exchange settings, turn on tax-lot selection. Filter your holdings for the coin you’ll sell, sort by highest cost basis (not average cost or FIFO), and note the lot IDs (wallet path or TXIDs) and timestamps.
- Capture proof. Screenshot the lot list and the selection screen showing the chosen lots. Make sure date/time and the visible lot IDs are in frame; save as PNG/PDF to your packet.
- Execute and export the same day. Place the order using the selected lots, then immediately export the fills/executions and the TXIDs. Drop those files into the packet so the trail is complete and easy to follow.
- Optional: rebuy and memo. If you want to keep exposure, rebuy right away. Add a two-line memo naming the sold lots and the rebuy time; note you reviewed wash-sale considerations (crypto is currently outside the statutory wash-sale rule, but rules can change).
Next action: create a desktop folder named “YYYY-MM-DD Trade Packet — [asset]” and pre-save a blank 2-line memo so you’re ready before your next sell.
- Pre-set the method.
- Save TXIDs and CSVs.
- Reconcile proceeds totals later.
Apply in 60 seconds: Create a “Trade Packet” folder with five screenshots and one CSV.
Pro nudge (U.S.): Complex DeFi/NFT/multi-chain facts? Ask a crypto-literate CPA to review your 8949 mapping before year-end.
U.S. 2025 rules: $3k/$1.5k cap, FIFO default, 1099-DA, NIIT
Bottom line: You can still deduct up to $3,000 of net capital loss against ordinary income ($1,500 if married filing separately), and any excess carries forward without limit—so unused losses don’t expire.
How it nets: Losses first reduce gains; any remainder can offset ordinary income up to the cap.
If you don’t identify lots, many platforms treat sales as FIFO; with contemporaneous records, the IRS permits Specific Identification for crypto units—powerful when you pick higher-basis lots, but only if your lot choice is documented at the time.
2025 context: Brokers begin using Form 1099-DA for 2025 digital-asset sales (basis generally not required for 2025), and the 3.8% NIIT may apply above its thresholds.
Wash-sale §1091 targets “stock or securities,” so under current law it generally doesn’t reach BTC/ETH; still, don’t rely on an immediate buy-back for relief, as proposals are floating.
Next action (60 seconds): Note your filing status and check whether NIIT and a state rate apply; then set your exchange’s tax-lot method and save your lot-selection proof (a timestamped screenshot is fine). If in doubt, assume FIFO and start documenting on your next trade.
Show me the nerdy details
NIIT 3.8%. If you’re above the thresholds, NIIT can apply to net investment income, including capital gains. This tool adds NIIT to the capital-gains rates when toggled on. The planner does not compute NIIT thresholds or phase-outs; toggle NIIT at your discretion. Always confirm with full return software or a professional (IRS, 2025-08).
UK: pooling, same-day & 30-day matching
In the UK, a loss “harvest” won’t stick if you repurchase the same token within 30 days of the sale. HMRC matches in this order: same-day purchases, then the 30-day “bed-and-breakfast” window, and only then the Section 104 pool.
Check the calendar, not just the price. Example: sell on 2025-05-10 and rebuy the same token on 2025-05-25—your sale matches that 2025-05-25 purchase, not the pool, so the loss may be neutralized.
- Log your sale date and any buys of the same token on that day or in the next 30 days.
- Need exposure? Use a non-identical proxy until day 31, then reassess your original position.
Next action: confirm dates today; if a 30-day clash exists, move to a proxy and set a day-31 reminder.
Non-identical proxy, explained
Pick something genuinely different. Swapping Coin A → Coin B works only if they’re not the same asset; avoid wrapped or pegged aliases that track Coin A one-for-one.
- Token swap: rotate into a major token that isn’t a wrapped version of what you sold.
- Broader sleeve: use a diversified crypto index exposure if it fits your risk and mandate.
- Paper trail: write one line—“Temporary diversification to maintain market exposure, not a tax loop.”
- Confirm the 30-day window.
- Prefer a non-identical proxy.
- Record your reason.
Apply in 60 seconds: Run a 30-day check on your last UK disposal.
Pro nudge (UK): Unsure if two assets are “non-identical”? Ask a UK tax adviser before trading.
Canada: ACB + superficial loss (multi-wallet example)
When year-end harvesting collides with auto-buys, Canada’s superficial loss rule can blunt your capital-loss deduction—without erasing value.
Bottom line: If you (or your controlled accounts) repurchase identical property within ±30 days of the loss sale and still hold any units 30 days after, the loss is denied for now and added to your adjusted cost base (ACB). The rule is mechanical; your strategy isn’t—timing DCA and proxies is still your lever (CRA, 2025-03).
Worked example—two wallets
- Setup. Wallet-1: 2.0 ETH with ACB C$3,600. Wallet-2: 1.0 ETH with ACB C$2,200. You sell 1.5 ETH at a C$900 loss on 2025-12-10. Auto-DCA buys 0.6 ETH on 2025-11-25 and 0.6 ETH on 2025-12-20. You still hold on 2026-01-09.
- Window check. Under this rule, both buys sit inside the ±30-day window, and you still own ETH after day 30 → superficial loss triggered.
- ACB effect. Repurchased and still held: 1.2 ETH. Disposed: 1.5 ETH. Denied portion = C$900 × (1.2/1.5) = C$720; allowed loss now = C$180—therefore only C$180 is currently deductible. The C$720 is added to the ACB of the 1.2 ETH bought in the window across Wallet-1/Wallet-2, reducing future taxable gains.
Reason in plain English: A denied (superficial) loss isn’t gone; it’s deferred via a higher ACB. In CRA terms, “superficial loss” and “denied loss” describe the same event—two labels, one outcome.
Fix next time. Pause DCA for ≥31 days around the harvest or rotate into a non-identical proxy until day 31. Note: repurchases inside registered plans (e.g., RRSP/TFSA) can permanently deny the loss without a useful ACB bump for you.
Next action: Turn off auto-buys today and set a calendar reminder for day 31 to restore your target exposure.
- Track buys across wallets.
- Update ACB the same day.
- Plan harvests around DCA.
Apply in 60 seconds: Turn off auto-buys for any coin you plan to harvest.
Pro nudge (Canada): ACB roll-forwards across many wallets? Have a preparer validate your spreadsheet.
Australia: Part IVA signals (risk vs legitimacy)
Bottom line: the ATO cares about substance, not shortcuts.
In practice, under Part IVA (general anti-avoidance), a tax-motivated sell-and-buyback can be denied even without a fixed “30-day” rule. What matters is purpose and real-world effect, not the calendar.
Before you trade, write a dated note with the non-tax reason—liquidity need, risk limit, rebalancing, or an exposure change—and the expected impact on your position. Don’t rely on cosmetic tweaks or same-day round-trips; change something real (timing, quantity, or instrument) so the trade shows commercial substance—a genuine shift you can evidence.
Next action: in the next minute, create a one-paragraph memo (YYYY-MM-DD) with your non-tax rationale and attach it to the order record.
3 signals of tax-driven round-trips
- Same-minute sell/buy with exposure unchanged
- Notes focused only on “creating a loss”
- Pattern repeats at quarter-ends
3 signals of a legitimate strategy shift
- Reduced allocation or deleveraging
- Rotation to a different sector/asset
- Dated memo stating the thesis change
- Write the thesis change.
- Allow some time separation.
- Keep dated records.
Apply in 60 seconds: Draft one sentence explaining the change in exposure.
Pro nudge (Australia): Concerned about Part IVA? Request a short written position from your adviser.
CP2000 mismatches after 1099-DA: a 3-step primer
If a CP2000 (underreporter notice) just arrived, pause—most cases clear up once the totals line up, assuming your records are complete.
Bottom line: The IRS already has your 1099-DA proceeds; your Form 8949 should mirror that same total, with cost basis documented in a short attachment or workpapers—not buried in proceeds. If a lot’s basis is still pending, note it briefly rather than reshaping proceeds.
- Pull the records. Gather 1099-DA, Form 8949, Schedule D, exchange CSV exports, and key TXIDs. If you traded on multiple platforms, pull each form and file for the notice year.
- Reconcile proceeds, then explain basis. Your 8949 proceeds total should equal the 1099-DA sum (e.g., if 1099-DA shows $42,500, your 8949 proceeds should also total $42,500). Show basis by lot in a simple attachment; don’t rewrite proceeds to “force” a result.
- Respond on time. Follow the CP2000 instructions for your reply method and deadline. Include a short cover note referencing the tax year and notice, plus copies of 1099-DA, 8949, Schedule D, and your reconciliation sheet.
Next action (60-seconds): create a folder named 2025-CP2000-ready and drop your latest trade packet (CSV + TXIDs + draft 8949) inside, so you’re ready before filing season.
Cut-off dates & reminders (US/CA/UK/AU)
Conclusion: The calendar decides what counts as “this year.”
Reason: US/CA end Dec 31; UK runs 6 Apr–5 Apr; AU runs 1 Jul–30 Jun.
60-second action: Set a reminder 10 days before your year-end (GOV.UK, 2025-04; CRA, 2025-03).
| Country | Year-end | Do this week |
|---|---|---|
| United States | Dec 31 | Run estimator; set Specific-ID; export CSVs |
| Canada | Dec 31 | Check ACB; pause DCA 31+ days |
| United Kingdom | 6 Apr – 5 Apr | Avoid 30-day match or use proxies |
| Australia | 1 Jul – 30 Jun | Document strategy change; allow time |
Record-keeping & reconciliation (8949, Schedule D)
Conclusion: One tidy packet per trade date makes April quiet.
Reason: When Form 8949 gross proceeds equal your Forms 1099-DA totals, most friction disappears.
60-second action: Create “2025 Tax — Digital Assets” and sort folders by month (IRS, 2025-08).
Packets win audits. For each sale day, save the items below and name files with YYYY-MM-DD_exchange_asset so they sort cleanly:
- Lot/lot-selection screenshot showing IDs or TXIDs.
- Order ticket and fill confirmations (price, quantity, timestamps).
- TXIDs and a same-day CSV export from the exchange.
- A 2-line memo noting why these lots were sold and any fee/basis nuance.
When you prepare the 2025 return in early 2026, reconcile first: the total proceeds on Form 8949 should match the sum of gross proceeds reported on all 1099-DA forms. Keep cost basis by lot in your workpapers; don’t alter proceeds to “force” a tie.
If multiple platforms are involved, tie each one, then the grand total. If a number won’t match (e.g., fee timing or a missing lot), add a one-line variance note and keep the math with the packet.
Next action: Set today’s trades into a dated subfolder and drop in the four items above before you log off.
Operator kit: CPA quote-prep • software tiers • fee ranges
Money Block — Quote-prep list for a crypto-literate CPA
Conclusion: A clean starter packet lowers price and turnaround.
Reason: Clear scope and evidence let firms quote accurately.
60-second action: Email this list to two firms and request a fixed quote.
- Last year’s 8949 & Schedule D
- 2025 exchange CSVs (all accounts) + TXIDs
- Wallet addresses used for sales
- Any prior CP2000 letters or IRS notices
Neutral action: Ask for scope, timeline, and who will do the work.
Money Block — Coverage-tier map (crypto tax software)
Conclusion: Pick software by features, not logos.
Reason: Import formats and 1099-DA support decide whether your 8949 matches pain-free.
60-second action: Trial two tools and compare their 8949 totals against your CSVs.
| Tier | Core features | Who it fits |
|---|---|---|
| Free | Basic imports, 100–200 txns, single chain | New or light users |
| Basic | 1099-DA import, multiple exchanges, simple DeFi | Most retail users |
| Pro | Advanced DeFi/NFT, custom CSV mapping, multi-year carry | Power users & advisors |
Neutral action: Export test data and check that proceeds and lots line up.
Money Block — Typical 2025 prep fee bands (non-promotional)
Conclusion: Price tracks complexity and documentation.
Reason: Multi-wallet and DeFi paths push you into higher bands.
60-second action: Save this table, then confirm current fees on the provider’s site.
| Scope | Range (USD) | Notes |
|---|---|---|
| Simple (≤100 txns, no DeFi) | $300–$900 | Varies by state and documentation quality |
| Standard (≤1,000 txns or 1 chain) | $900–$2,000 | Higher if multiple wallets |
| Complex (DeFi/NFT/multi-chain) | $2,000+ | Engagement letter recommended |
Short Story: Friday afternoon, one clean packet
It’s 4:37 p.m. on a Friday. Your manager pings: “Trim tax drag without changing exposure?” You open the ETH lot you’ve carried since 2022, still red after two rallies. You switch from FIFO to Specific-ID, sort by highest basis, and pick two small lots totaling $5,800.
You sell at 4:41, rebuy at 4:42 so your exposure stays the same. Screenshots: lot list before, order ticket during, fills after. You export the CSV, paste TXIDs, and write a two-line memo: “Harvested LT loss; immediate rebuy to maintain strategy.” The calculator shows a ~<$5,800> LT offset now, with carryforward ready. At 4:53, the packet lands in 2025 Tax → Digital Assets. You message finance: “Loss banked. Exposure unchanged. Docs attached.” The thread goes quiet. The room smells like orange peel from the afternoon tea. You close the lid and keep your weekend.
Infographic — 3-step harvest map by jurisdiction
United States
- Set Specific-ID; pick high-basis lots
- Sell → rebuy; document TXIDs
- Apply ST/LT rates; then $3k/$1.5k cap
United Kingdom
- Same-day match
- 30-day match
- Section 104 pool
Canada
- Compute ACB across wallets
- Check ±30-day rule
- Add denied loss to ACB
Australia
- Write strategy change
- Allow time or rotate assets
- Keep dated notes
Global Harvest Map: Key Rules at a Glance
Tax-loss harvesting strategies vary significantly by country. Here’s a simplified breakdown of the core rules you need to know before you trade.
- Specific-ID: Choose high-cost lots to maximize losses. Documentation is critical.
- Wash Sale Rule: Currently does not apply to crypto (as ‘property’), allowing immediate rebuy.
- $3,000 Limit: Deduct up to $3,000 of net capital loss against ordinary income annually.
- 30-Day Rule: Repurchasing the same asset within 30 days negates the harvested loss.
- Matching Order: Sales are matched against buys in this order: same-day, then next 30 days, then Section 104 pool.
- Proxy Assets: To maintain exposure, swap to a non-identical asset for 31+ days.
- Superficial Loss: A ±30-day rebuy window denies the loss if you still hold the asset.
- ACB Addition: The denied superficial loss is added to the Adjusted Cost Base (ACB) of the repurchased asset.
- Pause Auto-Buys: Temporarily halt any DCA plans around the harvest date to avoid the rule.
- Part IVA (GAAR): A general anti-avoidance rule can deny losses from trades with a dominant tax-saving purpose.
- Substance over Form: Demonstrate a real commercial reason for the trade beyond the tax benefit.
- Document Rationale: Keep dated memos explaining your non-tax reasons for the transaction (e.g., risk management).
How are Crypto Investors Managing Taxes?
Recent data reveals a significant gap between the potential tax savings available and the actions investors are taking. Many are leaving money on the table.
Source: Aggregated data from a 2025 Crypto Investor Behavior Study by leading tax software providers.
Your Pre-Harvest Action Plan
Are you ready to execute a clean, compliant tax-loss harvest? Go through this checklist to ensure all your bases are covered before you click “sell.”
Get started by checking off your first task!
FAQ
Does the U.S. wash-sale rule apply to crypto in 2025?
Answer: Generally no—§1091 covers stock and securities, not property like BTC/ETH.
Reason: Statutory language; facts differ if a token is a security.
60-second action: Note the asset type in your packet.
Can I harvest and immediately rebuy in the U.S.?
Answer: Yes, if you can document Specific-ID (or accept FIFO).
Reason: Losses offset by term, then up to $3,000 ($1,500 MFS) of ordinary income; remainder carries forward.
60-second action: Pre-set lot selection and export the CSV.
Why didn’t my UK loss “stick” after I rebought?
Answer: Same-day/30-day matching beat the Section 104 pool.
Reason: The repurchase matched back to your disposal.
60-second action: Wait 30+ days or use a non-identical proxy.
What’s the Canadian superficial loss rule in one line?
Answer: Rebuy within ±30 days and still hold 30 days after? Loss denied and added to ACB.
Reason: That’s the rule’s design.
60-second action: Pause auto-buys for 31 days on target coins.
What if my 1099-DA totals don’t match my 8949?
Answer: Reconcile proceeds first; then explain basis differences in workpapers.
Reason: IRS systems check totals before subtleties.
60-second action: Build your proceeds tie-out now.
Conclusion — Harvest now, keep your stance
You don’t have to change your core allocation to cut tax drag. A rate-aware harvest with Specific-ID, clean TXID/CSV proof, and respect for local rules (UK 30-day, CA superficial loss, AU Part IVA) does most of the work.
On the U.S. side, remember the order of operations: same-term netting → cross-net → up to $3,000/$1,500 against ordinary income, with the remainder carried forward.
Paperwork is the quiet multiplier. If your Form 8949 proceeds equal your 1099-DA totals, almost every downstream friction—from CP2000 to fee disputes—gets smaller. Think “proceeds first, basis second,” and keep the trail human-readable.
In practice, harvests are three moves repeated well: choose lots on purpose, document like a pro, respect the calendar. Do those, and you keep market exposure while banking losses that compound your future choices—without the drama.
- Specific-ID or FIFO—decide now. If using Specific-ID, capture lot-selection screenshots before you sell.
- Mind the local rule. UK: same-day → 30-day → pool. CA: ±30 days + still holding → ACB deferral. AU: show commercial substance, not a round-trip.
- Tie proceeds cleanly. 8949 totals should mirror 1099-DA; explain basis in workpapers, not in proceeds.
- NIIT/state. If thresholds apply, 3.8% stacks on top of your bracket; don’t forget your state rate.
Your next 15 minutes
- Open the Quick Estimator, enter your real rates, and set a harvest target.
- Turn on Specific-ID, pick lots, and start a dated Trade Packet (5 screenshots + 1 CSV + TXIDs).
- If you’re in the UK/CA/AU, run the 30-day/±30-day/substance check and set a day-31 reminder if needed.
- Drop today’s files into “2025 Tax → Digital Assets”; write a two-line memo explaining the lot choice.
If a CP2000 ever arrives, you’ll already have the packet: mirror proceeds, show basis by lot, and reply on time. That’s how you keep your exposure—and your weekend.
Disclaimers & when to call a pro
Information-only. This page provides general, educational information. It is not tax, legal, or financial advice. Rules change and personal facts matter. Consider a qualified tax professional if you (1) have NIIT interactions, (2) trade across multiple chains/DEXs, (3) hold tokens that may be securities, or (4) received a CP2000 or notice.
Update log & your next 15-minute step
Update cadence. We track IRS (1099-DA; capital loss treatment), HMRC (crypto pooling), CRA (superficial loss), and ATO (Part IVA). Where older than 24 months, we note that data here moves slowly; latest official year is shown.
Next 15 minutes: Run one position through the estimator with your real rates, turn on Specific-ID, and prepare a single trade packet. If you’re in the UK/CA/AU, check your matching rule before you sell.
Calculator methodology
The estimator takes user-entered ordinary and LTCG rates, an optional 3.8% NIIT toggle, and a state rate. It offsets a proposed short-term or long-term loss against same-term gains first, then cross-nets the other term, then applies the $3,000/$1,500 ordinary-income cap; any remainder is a carryforward. NIIT is added only to capital-gains components in this quick planner. This planner doesn’t compute NIIT thresholds or phase-outs; toggle NIIT at your discretion. Always confirm with full return software or a professional.
Crypto Tax-Loss Calculator 2025, FIFO vs Specific-ID, 1099-DA, UK 30-day rule, Canada superficial loss
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