How Do Wash Sale Rules, Common in Stock Trading, Generally Apply to Crypto in the US?

In traditional stock trading, the wash sale rule prevents an investor from claiming a tax loss if they buy a substantially identical security within 30 days before or after the sale. Crucially, the US Internal Revenue Code did not explicitly apply the wash sale rule to property like cryptocurrency until recent legislative changes, such as those proposed in the Infrastructure Investment and Jobs Act.

Therefore, for tax years prior to new legislation, crypto traders could potentially harvest losses and immediately repurchase the asset, though this is changing.