No — as of 2026, the wash-sale rule (which disallows a loss if you repurchase the same security within 30 days) does not apply to cryptocurrency. The IRS classifies crypto as property, not a security, so you can sell crypto at a loss and immediately repurchase the same coin without losing the tax deduction. This may change with future legislation, but for now it is a significant advantage over stock tax-loss harvesting.

The IRS treats cryptocurrency as property. Selling, trading, or spending crypto triggers a capital gain or loss equal to the difference between your cost basis and the sale price. Short-term gains (held less than 1 year) are taxed as ordinary income; long-term gains (held more than 1 year) are taxed at 0%, 15%, or 20% depending on your income. Receiving crypto as payment for services is taxed as ordinary income.

Net capital losses (including crypto losses) can offset up to $3,000 of ordinary income per year. Losses above $3,000 carry forward to future years to offset future capital gains or additional ordinary income. There is no limit on how many years losses can carry forward.

Trading one cryptocurrency for another (e.g., Bitcoin for Ethereum) is a taxable event — you must report the gain or loss on each trade. Using crypto to purchase goods or services is also taxable. Simply holding crypto (HODLing) is not a taxable event. Receiving crypto as a gift is not taxable until you sell it (your basis is the donor's basis or the fair market value on the date of the gift, whichever is lower).

You must track: the date of each acquisition, the cost basis (purchase price plus fees), the date of each sale or exchange, the sale proceeds, and the resulting gain or loss. For large portfolios with many transactions, crypto tax software (CoinTracker, Koinly, TaxBit) can automate this tracking. The IRS requires you to report all crypto transactions, and exchanges are required to issue 1099s for transactions above certain thresholds.

A Donor-Advised Fund (DAF) is a charitable giving account sponsored by a public charity (such as Fidelity Charitable or Schwab Charitable). You contribute cash, securities, or other assets to the DAF, receive an immediate tax deduction for the full contribution, and then recommend grants to qualified charities over time. The assets grow tax-free inside the DAF until distributed.

Cash contributions to a DAF are deductible up to 60% of AGI. Contributions of appreciated securities are deductible at fair market value up to 30% of AGI. Excess contributions carry forward for up to 5 years. Unlike private foundations, DAFs have no minimum distribution requirement.

Bunching means contributing multiple years of planned charitable giving into a DAF in a single year to exceed the standard deduction threshold and itemize. For example, instead of donating $10,000/year for 5 years (which may not exceed the standard deduction), you contribute $50,000 in Year 1 to a DAF, take the full itemized deduction, and then distribute $10,000/year to charities from the DAF over the following 5 years.

Yes — and this is one of the most powerful aspects of a DAF. You can contribute long-term appreciated stock directly to the DAF, deduct the full fair market value (up to 30% of AGI), and avoid paying capital gains tax on the appreciation. The DAF can then sell the stock tax-free and invest the proceeds for future charitable distributions.

A DAF is simpler and cheaper to establish (no legal fees, no IRS approval), has no minimum distribution requirement, offers higher deduction limits, and provides anonymity for grants. A private foundation offers more control (you can hire family members, make program-related investments, and set your own grant criteria) but requires 5% annual distributions, has lower deduction limits, and faces excise taxes on investment income.

For a charitable contribution of appreciated stock, the fair market value (FMV) is generally the average of the high and low selling prices on the date of the contribution. This valuation method is outlined in IRS Publication 561, 'Determining the Value of Donated Property.' If the stock is traded on an exchange, this information is readily available. For closely held stock, a qualified appraisal may be required, especially for donations exceeding $5,000, as per Treasury Regulation §1.170A-13. Accurate valuation is crucial for maximizing your deduction and avoiding IRS scrutiny.

Yes, strict record-keeping is essential for a charitable contribution of appreciated stock. For donations valued at $250 or more, you must obtain a contemporaneous written acknowledgment from the charity stating the amount of cash and a description (but not value) of any property contributed, and whether the organization provided any goods or services in return, as per IRS Publication 526. For noncash contributions exceeding $500, you must file Form 8283, 'Noncash Charitable Contributions.' If the stock's value exceeds $5,000, a qualified appraisal is generally required, and a summary of the appraisal must be attached to Form 8283, as detailed in Treasury Regulation §1.170A-13.

If you donate appreciated stock held for less than one year, it is considered short-term capital gain property. In this scenario, your charitable contribution deduction is limited to your cost basis in the stock, rather than its fair market value, as outlined in IRS Publication 526. This means you would not avoid capital gains tax on the appreciation. To receive a deduction for the full fair market value and avoid capital gains tax on the appreciation, the stock must be considered long-term capital gain property, meaning you must have held it for more than one year before the donation date. This distinction is critical for maximizing the tax benefits of a charitable contribution of appreciated stock.

Yes, a charitable contribution of appreciated stock can be made to a Donor-Advised Fund (DAF), and it offers significant tax advantages. Donating appreciated stock to a DAF allows you to claim an immediate tax deduction for the fair market value of the stock, provided it's long-term capital gain property, and avoid capital gains tax on the appreciation, similar to direct donations to public charities. The DAF then sells the stock, and the proceeds grow tax-free. You can recommend grants from the DAF to qualified charities over time. This strategy is particularly useful for those who want to receive an immediate tax deduction but prefer to decide on specific grant recipients later, as per IRS Publication 526 and regulations governing DAFs.

Tax-loss harvesting is the practice of selling investments at a loss to offset capital gains from other investments, reducing your overall tax liability. The harvested losses first offset capital gains dollar-for-dollar. If losses exceed gains, up to $3,000 of excess losses can offset ordinary income per year. Remaining losses carry forward indefinitely to future years.

The wash-sale rule disallows a loss deduction if you buy the same or "substantially identical" security within 30 days before or after the sale. To avoid triggering the rule, you can immediately reinvest in a similar but not identical security (e.g., sell a Vanguard S&P 500 ETF and buy a Fidelity S&P 500 ETF), wait 31 days before repurchasing, or use the loss to rebalance your portfolio.

No — losses in tax-deferred accounts (IRA, 401(k)) cannot be harvested because all gains and losses inside those accounts are tax-deferred. Tax-loss harvesting only applies to taxable brokerage accounts. This is one reason why it can be beneficial to hold more volatile assets in taxable accounts where losses can be harvested.

Yes — and cryptocurrency has a significant advantage: the wash-sale rule does not currently apply to crypto (it applies only to "securities" under the tax code, and crypto is classified as property). This means you can sell crypto at a loss, immediately repurchase the same coin, and still claim the loss deduction. This may change with future legislation.

Capital losses first offset capital gains of the same type (short-term losses offset short-term gains; long-term losses offset long-term gains). Excess losses can offset gains of the other type. After offsetting all capital gains, up to $3,000 of net capital losses can offset ordinary income per year. Remaining losses carry forward indefinitely.

Crypto tax loss harvesting involves selling cryptocurrency at a loss to offset capital gains and, potentially, a limited amount of ordinary income. For the 2026 tax year, you can use these realized losses to first offset any capital gains from other crypto sales or investments. If your capital losses exceed your capital gains, you can then deduct up to $3,000 of the remaining loss against your ordinary income, as per IRS Publication 550. Any losses beyond this $3,000 limit can be carried forward indefinitely to offset future capital gains and ordinary income, providing a valuable long-term tax planning tool.

When performing crypto tax loss harvesting, the maximum amount you can deduct against your ordinary income in a single tax year is $3,000. This limit applies after you have used your capital losses to offset all your capital gains. This rule is consistent with the treatment of capital losses from other investments, as outlined in IRS Publication 550. Any losses exceeding this $3,000 threshold can be carried forward to subsequent tax years, allowing you to utilize them against future capital gains and ordinary income until they are fully depleted.

Yes, you can perform crypto tax loss harvesting multiple times within the same tax year. There are no IRS restrictions preventing you from realizing losses throughout the year as market conditions change. This flexibility allows you to strategically manage your portfolio and optimize your tax position. However, it's crucial to accurately track all your transactions and ensure proper cost basis accounting for each sale to avoid errors when preparing your tax return, as detailed in IRS Notice 2014-21 regarding virtual currency.

Unused crypto tax loss harvesting deductions, specifically those exceeding the $3,000 annual limit against ordinary income, can be carried forward indefinitely to future tax years. This means you don't lose the benefit of these losses; you can apply them to offset capital gains and up to $3,000 of ordinary income in subsequent years. This carryforward provision, consistent with IRS Publication 550, is a significant advantage of tax loss harvesting, allowing you to mitigate future tax liabilities even if you don't have sufficient gains or ordinary income in the current year.

Yes, when performing crypto tax loss harvesting, you must report all your cryptocurrency sales, including those at a loss, on IRS Form 8949, Sales and Other Dispositions of Capital Assets. The totals from Form 8949 are then transferred to Schedule D, Capital Gains and Losses, where your net capital gain or loss is calculated. It is essential to accurately record the date of acquisition, date of sale, cost basis, and sales price for each transaction. Maintaining detailed records is crucial for substantiating your reported losses if questioned by the IRS, as emphasized in IRS Notice 2014-21.

Self-employed individuals can choose from a SEP-IRA (up to 25% of net self-employment income, max $72,000 in 2026), a Solo 401(k) (up to ~$70,000 plus $7,500 catch-up if over 50), a SIMPLE IRA, or a Defined Benefit Plan (which can shelter $100,000+ annually for high earners). The Solo 401(k) is typically the best option for most self-employed individuals because it allows both employee deferrals and employer contributions.

In 2026, a Solo 401(k) allows up to $24,500 as an employee deferral (plus $7,500 catch-up if over 50) plus up to 25% of net self-employment income as an employer contribution, for a combined maximum of approximately $70,000 ($77,500 with catch-up). This is significantly higher than a SEP-IRA for most income levels.

Generally no — you cannot contribute to both a Solo 401(k) and a SEP-IRA for the same self-employment income in the same year. However, you can have a Solo 401(k) for your self-employment income and participate in an employer's 401(k) at a day job, though combined employee deferrals across all plans are capped at $24,500 in 2026.

You must establish a Solo 401(k) by December 31 of the tax year to make employee deferrals for that year. Employer profit-sharing contributions can be made up to the tax filing deadline (including extensions). A SEP-IRA, by contrast, can be established and funded up to the tax filing deadline.

No — retirement contributions reduce income tax but not self-employment tax. SE tax is calculated on net self-employment income before retirement contributions. However, the deduction for half of SE tax reduces your AGI, which in turn reduces the base on which retirement contribution limits are calculated.

Yes. You can donate long-term appreciated stock (held more than 1 year) directly to a qualified charity or Donor-Advised Fund and deduct the full fair market value on the date of the gift — up to 30% of AGI. You also avoid paying capital gains tax on the appreciation. This is almost always more tax-efficient than selling the stock and donating cash.

When you donate appreciated stock, you get two tax benefits: (1) a charitable deduction for the full fair market value, and (2) you avoid capital gains tax on the appreciation. When you donate cash, you only get the charitable deduction. For stock with large embedded gains, the difference can be tens of thousands of dollars.

You can donate publicly traded stocks, mutual funds, ETFs, bonds, real estate, private company stock, cryptocurrency, and other appreciated assets. The deduction rules vary by asset type: publicly traded securities are deductible at fair market value; private company stock and real estate require a qualified appraisal; cryptocurrency is treated like property.

Contributions of long-term appreciated capital gain property to public charities are deductible up to 30% of AGI. Contributions to private foundations are limited to 20% of AGI. Excess contributions carry forward for up to 5 years. Cash donations to public charities are deductible up to 60% of AGI.

Yes. The IRS treats cryptocurrency as property, so donating appreciated crypto directly to a qualified charity or DAF allows you to deduct the fair market value and avoid capital gains tax on the appreciation — the same as donating appreciated stock. The charity or DAF can then sell the crypto tax-free.

When you inherit an asset, your cost basis is "stepped up" to the fair market value on the date of the decedent's death (or an alternate valuation date 6 months later). This means all appreciation during the decedent's lifetime is permanently erased for capital gains purposes. If you sell the asset immediately after inheriting it, you owe zero capital gains tax on the lifetime appreciation.

Most capital assets that pass through an estate receive a step-up: stocks, bonds, mutual funds, real estate, business interests, and collectibles. Assets held in IRAs and 401(k)s do not receive a step-up — they are subject to ordinary income tax when withdrawn. Assets in irrevocable trusts may or may not receive a step-up depending on how the trust is structured.

In community property states (California, Texas, Arizona, Nevada, Washington, Idaho, Louisiana, New Mexico, Wisconsin), both halves of community property receive a step-up in basis when one spouse dies — not just the deceased spouse's half. This is a significant advantage over common law states, where only the deceased spouse's share receives the step-up.

For very large embedded gains, holding appreciated assets until death can eliminate the capital gains tax entirely through the step-up in basis. However, this strategy must be weighed against estate tax exposure (if the estate exceeds the exemption), liquidity needs, and the opportunity cost of holding a concentrated position. Uncle Kam can model the tradeoffs for your specific situation.

Yes — donating appreciated assets to a qualified charity or Donor-Advised Fund eliminates the capital gains tax and generates a charitable deduction for the full fair market value. This is often more tax-efficient than holding until death (which avoids capital gains but may trigger estate tax) or selling and donating cash (which triggers capital gains before the donation).