How capital losses help
If you sell crypto for less than it cost, the capital loss reduces your capital gains for that year. Losses are applied before the 50% discount, which makes them worth more against short-term gains.
- Capital losses can’t reduce wages or other ordinary income.
- Unused losses carry forward with no time limit.
Timing: before 30 June
A loss counts in the income year the sale happens. Investors who have made gains often review losing positions in May and June, before the year closes.
- The trade date is what matters, not when cash reaches your bank.
- Fees on the sale add to the loss.
The wash-sale trap
Selling an asset and buying it back soon after, mainly to claim the loss while keeping the position, is a wash sale. The ATO has said it can cancel the tax benefit of these arrangements, and it has flagged crypto specifically.
- The test is the purpose of the arrangement, not a set number of days.
- If you want to keep exposure, get advice before making any trade for tax reasons.
Keep it real and recorded
Only sell if you genuinely want to change your position. Record the sale, the price and the reason, and keep the exchange export.
- Run the numbers first with a tax estimate.
- A registered tax agent can tell you how the rules apply to you.
Your next steps.
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Sources & fact check
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- ATO: crypto asset investments
- ATO: transactions acquiring and disposing of crypto assets
- ATO ruling TR 2008/1: wash sales
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