I am not the strongest mathematician, I think I have a genius way to take profit while minimizing tax implications. I must be missing something.
Can someone critique my take profit strategy?
When I look at my exchange account status, it says you invested X amount and withdrawn X-1, your profit is Y on all investments. Esentially, all but 1 of my principal is moved off exchange. My withdrawals were to put coins on chain and a minimal amount spent on ETH gas fees so I still have them.
My biggest gainers were put on chain. For reference it was ETH, BTC and ADA which I will HODL
So if I sell my losers left in my account, which will give me a good tax benefit but still give me cash equivalent to Y-1 of gains. Am I still making money by taken it off the table?
The IRS has noted your diabolical plans.
I’m not American so the IRS can eat me lol
If you ever wanted to the rich in this life, no problem:
The tax man won’t allow that
I really don’t think that your strat is effective, you should always do thorough research and follow certain principles while trading. I always use the ‘Buy High Sell Low’ method and it has worked wonders for me. Happy to help.
Yes that would be a good strategy, it’s known as tax loss harvesting, assuming your from the US you can only use $3000 per year to offset gains but anything above $3000 that you sell at a loss will carry forward to the next tax year.
With securities you would not be able to buy back the assets at the new lower cost basis for 30 days due to wash trading rules, those don’t exist in Crypto yet but probably will soon and even sooner if the current bill passes.
Thanks for linking this to tax harvesting, Previously I couldn’t understand how taking a loss was beneficial This makes sense now. The other thing I could do with the cash is invest it in my retirement account and decrease my taxable income as well.
One of the best profit taking strategies I’ve seen is: DCA in when the asset is red, DCA out when it’s green. You likely will miss the top of you try timing the market so this helps to secure profit and keeps skin in the game in case it continues to go up .
Dollar cost averaging means you set times to sell or buy regardless of the price with a fixated time..
This sounds like swing trading to me.
This is the best way I can see
This is the way
The IRS has noted your diabolical plans.
I’m not American so the IRS can eat me lol
If you ever wanted to the rich in this life, no problem:
The tax man won’t allow that
I really don’t think that your strat is effective, you should always do thorough research and follow certain principles while trading. I always use the ‘Buy High Sell Low’ method and it has worked wonders for me. Happy to help.
Yes that would be a good strategy, it’s known as tax loss harvesting, assuming your from the US you can only use $3000 per year to offset gains but anything above $3000 that you sell at a loss will carry forward to the next tax year.
With securities you would not be able to buy back the assets at the new lower cost basis for 30 days due to wash trading rules, those don’t exist in Crypto yet but probably will soon and even sooner if the current bill passes.
Thanks for linking this to tax harvesting, Previously I couldn’t understand how taking a loss was beneficial This makes sense now. The other thing I could do with the cash is invest it in my retirement account and decrease my taxable income as well.
One of the best profit taking strategies I’ve seen is: DCA in when the asset is red, DCA out when it’s green. You likely will miss the top of you try timing the market so this helps to secure profit and keeps skin in the game in case it continues to go up .
Dollar cost averaging means you set times to sell or buy regardless of the price with a fixated time..
This sounds like swing trading to me.
This is the best way I can see
This is the way