Wall Street Journal Suggests ‘Quick Sale, Repurchase’ of Bitcoin ‘May Lower Your

[MOProgress]

An article published Dec. 21 by The Wall Street Journal (WSJ) has suggested investors should sell and then repurchase their Bitcoin (BTC) as a strategy to save on taxes.
In the context of the 2018 crypto bear market, the WSJ suggests that “the only good thing about investing in cryptocurrencies [this year] was the tax break.”
Given that the United States tax authority, the Internal Revenue Service (IRS), has treated crypto as investment property as of 2014 — akin to stocks and bonds, not currency — crypto users can allegedly benefit from the “special and often favorable” taxation policy the country gives to investments.
For all investments in the U.S. — whether in stocks or in crypto — short-term gains and losses apply to holdings held a year or less, and any gains are taxable at a rate of as high as 40.8 percent. Long-term gains and losses meanwhile max out at an upper bound of 23.8 percent.
While losses can be used to offset taxes on gains for all investments, the potential tax relief may be even greater than for traditional assets in the case of crypto, because a “a quirk” in U.S. tax rules permits traders to sell and reinvest their crypto right away, in full respect of the law.
This is because cryptocurrencies are exempt from so-called “wash sale” rules, which “prohibit capital-loss deductions when investors purchase a security such as a stock within 30 days of selling a loser.”

From Cointelegraph