Crypto Tax Loss Harvesting 2026 Wash Sale Rule Calculator
Estimate harvestable crypto losses, tax saved at your marginal rate, the $3,000 ordinary income offset, and the wash sale rule gap. Crypto is NOT subject to IRC §1091 wash sale rules in 2026 — but pending standalone legislation could change that. Last updated 10 August 2026.
| Total short-term losses | — |
| Total long-term losses | — |
| Offset against other gains | — |
| $3,000 ordinary income offset | — |
| Carryforward to next year | — |
| Estimated federal tax saved | — |
The crypto tax loss harvesting calculator is a free, browser-based tool that shows how much tax a realised crypto loss saves you in 2026. Enter your cost basis, current value and bracket, and it nets the loss against gains, applies the $3,000 ordinary income offset, and shows the carryforward. Nothing is uploaded.
Crypto tax loss harvesting is the practice of selling digital assets at a loss to offset capital gains and up to $3,000 of ordinary income per year. As of August 2026, the IRS treats crypto as property (IRS Notice 2014-21), which means IRC §1091 wash sale rules — the 30-day no-repurchase window that applies to stocks — do NOT yet apply to crypto. You can sell BTC at a loss and rebuy it the same minute.
Why The Wash Sale Gap Matters In 2026
IRC §1091 prohibits claiming a loss on a stock or security if you buy a “substantially identical” position within 30 days before or after the sale. Because the IRS classifies crypto as property rather than a security under Notice 2014-21, §1091 does not apply. That gap is still open for the 2026 tax year: you can sell BTC at a loss and rebuy it in the same minute.
Be careful with what you may have read about the One Big Beautiful Bill Act. Senator Lummis proposed a digital-asset amendment to the OBBB that would have extended the wash sale rules to crypto, with carve-outs for dealers and payment stablecoins. That amendment was removed before the bill was enacted on 4 July 2025 and is not law. It was reintroduced as standalone legislation and has not passed. So the correct position for a 2026 tax memo is: cite IRC §1091 and IRS Notice 2014-21 for the current treatment, and note the pending standalone bill as legislative risk — do not cite an OBBB wash-sale section, because none was enacted. The gap is genuinely open today, but it is an explicit legislative target, so treat any harvest strategy that depends on it as year-by-year rather than permanent.
How The $3,000 Ordinary Income Offset Works
Under IRC §1211(b), individual taxpayers may deduct net capital losses against ordinary income up to $3,000 per year ($1,500 if married filing separately). Losses are first netted within their class — short-term against short-term, long-term against long-term. The remaining net loss offsets other capital gains, then up to $3,000 of ordinary income. Any unused loss carries forward indefinitely under IRC §1212(b). For a 24% bracket taxpayer, the $3,000 offset is worth $720 per year in federal tax.
Best Practices For Crypto Harvest
(1) Document the sale — keep on-chain proof (txid), exchange confirmations, and timestamps. (2) Net short-term first — short-term losses offset short-term gains which are taxed at ordinary rates, so they're worth more. (3) Watch state law — California and a few states do not conform to federal wash sale exemption for crypto in all years. (4) Lot selection — Rev Proc 2024-28 ended universal-pool basis tracking for transactions on or after 1 January 2025; basis must now be tracked wallet-by-wallet and account-by-account, which can shrink the basis available in any one venue. (5) Reconcile against Form 1099-DA — brokers report gross proceeds for transactions from 1 January 2025 and cost basis for certain transactions from 1 January 2026, so a harvested loss the exchange values differently from your records will surface as a mismatch. Keep the txid and timestamp evidence.
Common Harvest Mistakes
(1) Harvesting without basis records — without cost basis, the IRS may treat your basis as $0. (2) Selling at a gain by mistake — check FIFO/HIFO output, not just current market price. (3) Ignoring state tax — California taxes capital gains as ordinary income. (4) Triggering AMT — large capital loss carryforwards can interact poorly with AMT in later years. (5) Missing the December deadline — settlement must occur by Dec 31 for the loss to count in that tax year.
Last updated 10 August 2026. Sources: IRC §1091, §1211(b) and §1212(b); IRS Digital Assets guidance (Notice 2014-21); Rev. Proc. 2024-28; IRS Instructions for Form 1099-DA. Informational only — not tax advice.