On May 23, 2018, we published revised versions of our Privacy Policy and User Agreements. Please read these updated terms and take some time to understand them. Your use of our services is subject to these revised terms.
Yes, I Agree.

Some Crypto Investors Could Owe 0% in Capital Gains Tax This Year

As investors mull over their year-end tax strategies, experts suggest that certain cryptocurrency investors may have a unique savings opportunity that is not widely known. In the aftermath of the cryptocurrency industry experiencing an almost $1.4 trillion loss in 2022, many investors turned to tax loss harvesting, a method that utilizes losses to counterbalance profits. However, following a resurgence in 2023, a different approach might be considered: strategically selling profitable cryptocurrencies held in brokerage accounts, a tactic commonly referred to as “tax gain harvesting.”

This particular strategy is most beneficial for investors positioned in the 0% long-term capital gains tax categorization who have held digital assets for more than a year, according to Wealthability CEO Tom Wheelwright. Wheelwright notes that as of Nov. 17, 2023, the price of Bitcoin has more than doubled since the beginning of 2023, resulting in some investors having accrued built-in gains. Those in the 0% bracket can sell their assets, recognize the gains and immediately repurchase them, as there is a no-wash sale rule applicable to gains.

The calculation of gains involves deducting the asset’s sales price from the original cost, known as the “basis.” However, when the currency is repurchased, the basis adjusts to the new purchase price, termed a “step-up in basis.” If prices continue to rise, subsequent sales will yield smaller profits due to the higher basis.

Wheelwright emphasizes the importance of recognizing tax-free opportunities to harvest crypto gains, advising investors to carefully consider their risk tolerance and financial goals before deciding to repurchase crypto.

The popularity of tax-loss harvesting in the crypto space is attributed to a wash sale loophole. Unlike losses for other assets, the IRS does not disallow crypto gains and losses for any asset within a 30-day window before or after the sale. Despite its popularity, tax-loss harvesting defers future tax, whereas the tax-gain strategy allows for selling at a gain without incurring immediate tax obligations.

The 0% long-term capital gains rate applies to taxable incomes of $89,250 or less for married couples filing together and $44,625 or less for individual filers. Taxable income is achieved by subtracting the larger standard or itemized deductions from adjusted gross earnings. For instance, if your 2023 salary is $55,000 and you contribute $5,000 pretax to a 401(k), your W-2 earnings become $50,000. With the $13,850 standard deduction for individual filers, your taxable income could fall below $44,625.

Looking ahead to 2024, the 0% brackets are even higher, with taxable income thresholds of $47,020 or less for individual filers and $94,045 or less for married couples filing together. Those engaged in crypto mining as clients of companies such as Stronghold Digital Mining Inc. (NASDAQ: SDIG) could explore how to benefit from the 0% tax rate this year and the years ahead.

About CryptoCurrencyWire

CryptoCurrencyWire (“CCW”) is a specialized communications platform with a focus on blockchain and the cryptocurrency sector. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CCW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CCW brings its clients unparalleled recognition and brand awareness. CCW is where breaking news, insightful content and actionable information converge.

To receive SMS alerts from CryptoCurrencyWire, text “CRYPTO” to 888-902-4192 (U.S. Mobile Phones Only)

For more information, please visit https://www.CryptoCurrencyWire.com

Please see full terms of use and disclaimers on the CryptoCurrencyWire website applicable to all content provided by CCW, wherever published or re-published: https://www.CryptoCurrencyWire.com/Disclaimer

New York, NY
212.994.9818 Office

CryptoCurrencyWire is powered by IBN


Select A Month

Official NewsWire Relationships

Anarchapulco Main Event Blockchain Africa Conference Blockchain Futurist Conference Blockchain Life Conference Blockchain Shift Coingenius Coinvention CryptoBlockCon CryptoFest European Blockchain Convention EVOLV - evolve.events Finovate nftexpoverse Paris Blockchain Week The North American Bitcoin Conference Virtual Blockchain Week The Voice of Blockchain World Crypto Conference

CryptoCurrencyWire Currently Accepts



Bitcoin Cash

Bitcoin Cash

Doge Coin






USD Coin

USD Coin

Contact us: 212.994.9818