Bitcoin is down. Use it to lower your 2026 tax bill.

If you bought bitcoin in the past year, you're probably sitting on a loss. On paper, that loss does nothing for you. Sell before December 31 and it can cut your 2026 tax bill, and you can buy your bitcoin back the same day.

How tax loss harvesting works

You sell bitcoin that's worth less than you paid for it. The realized loss offsets your capital gains for the year. If your losses are bigger than your gains, up to $3,000 can come off your ordinary income, and the rest carries forward to future years.

With stocks, the wash sale rule makes you wait 30 days before buying back. The IRS treats bitcoin as property, not a security, so that rule doesn't apply to bitcoin under current law. You can sell, book the loss, and rebuy right away. Your stack stays the same size.

A quick example

Say you bought 0.5 BTC at $110,000 ($55,000 total) and it's now worth $40,000. That's a $15,000 loss. Earlier this year you also sold some stock for $15,000 in short-term gains.

You sell the 0.5 BTC and rebuy 0.5 BTC right after. The $15,000 loss cancels out the stock gain. At a 24% federal rate, that’s about $3,600 you don’t pay for 2026, and you still hold 0.5 BTC. When a single dollar already gets taxed three times, keeping $3,600 of them is worth the paperwork.

The trade-off: your new cost basis is $40,000, so if you sell down the road, your gain will be larger. You're pushing tax into the future and keeping the cash now.

Run your own numbers

Want to see what this looks like for you? Our free tax loss harvesting calculator uses 2026 federal brackets. Enter your income, state, filing status, any gains you've realized this year, and your bitcoin purchases. It estimates how much you could save by harvesting before December 31.

Bitcoin Well tax loss harvesting calculator

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One thing to know before you sell

Congress wants to close this gap. H.R. 10357, the Digital Asset Tax Certainty Act, passed the House Ways and Means Committee 38 to 5 on September 16. As written, it would apply the wash sale rule to crypto sold after September 14, 2026, even if it becomes law next year. It still needs a House vote, a Senate vote and the President's signature.

If it passes as written, a loss followed by an immediate rebuy wouldn't count on your 2026 return. The loss would be added to the cost basis of the bitcoin you bought back, and you'd claim it when you eventually sell. So the worst case is roughly where you'd be if you had just held, minus trading costs.

If you want the loss locked in either way, wait 31 days before rebuying. Your CPA can tell you which route fits you.

Why do it with Bitcoin Well

For larger positions, the Bitcoin Well Infinite OTC desk handles both sides of the trade. You work with a person on our desk who knows it's a tax trade and executes quickly. We've lowered our fees on tax loss harvesting trades, so less of your savings goes to costs.

Bitcoin Well is non-custodial. You sell from your own wallet, and the bitcoin you buy back goes straight to your own wallet. We never hold your coins.

Working with a smaller position? You can sell and rebuy through the Bitcoin Well Portal.

Before you place the trade

Sell your highest-cost lots first (specific identification) to realize the largest loss.
Keep a record of every sale and rebuy: dates, amounts, prices and fees. Each sale goes on Form 8949.
Check your state's rules, which can differ from federal treatment.

December 31 is the deadline

A loss you take in January counts for 2027, not 2026. If you're holding bitcoin below what you paid and you've realized gains elsewhere this year, now is the time to act.

Speak with our OTC team

Disclaimer: This article is for educational purposes only and is not tax, legal or financial advice. Tax laws are complex, pending legislation may change, and your situation is your own. Talk to a qualified CPA, enrolled agent or tax attorney before making tax decisions. Bitcoin Well is not responsible for any tax liabilities, penalties or interest resulting from your use of this information.