When Is a Capital Loss Realized in a Crypto Transaction? ⎊ Path

When Is a Capital Loss Realized in a Crypto Transaction?

A capital loss is realized when a cryptocurrency asset is sold, traded, or disposed of for a price lower than its original cost basis. This loss can be used to offset capital gains, reducing an investor's overall tax liability.

The loss is realized at the exact moment of the transaction, and the amount is the difference between the sale price and the cost basis.

How Does Buying a Further Out-of-the-Money Option Limit the Risk of a Sold Option?

How Are Capital Losses Used to Offset Capital Gains?

What Is the Relationship between the Basis and the Cost of Transporting the Underlying Asset?

What Is the Maximum Capital Loss Deduction Allowed against Ordinary Income per Year?

How Does the “Cost of Carry” Relate to the Basis in Traditional Finance?

Can Capital Losses from Crypto Be Carried Forward to Future Tax Years?

How Does a “Put” Option Affect the Holding Period of the Underlying Stock?

What Is the Relationship between the Futures Basis and Contango or Backwardation?

Glossar

Capital Loss

Definition ⎊ Capital loss is the quantifiable reduction in an investor's principal resulting from the disposition of an asset or the closure of a financial position at a price lower than its adjusted cost basis.

Capital Loss Deduction

Offset ⎊ Capital Loss Deduction, within cryptocurrency, options, and derivatives, represents the portion of realized capital losses exceeding capital gains in a given tax year, applicable against ordinary income, subject to statutory limitations.