Tax-Loss Harvesting Calculator

Tax-loss harvesting means deliberately selling a position that's worth less than you paid, turning a paper loss into a realized one that can offset the gains you've already taken. The asset was going to be worth what it's worth either way - harvesting just converts the decline into something useful on your tax return.

The netting order

Losses don't get applied wherever you like. Short-term losses offset short-term gains first, and long-term losses offset long-term gains first. Whatever remains in either bucket then crosses over to offset the other type. Only after all capital gains are wiped out can leftover losses touch ordinary income - and there the annual deduction is generally capped at $3,000 ($1,500 if married filing separately). Anything still unused carries forward indefinitely to future tax years.

That ordering is why short-term losses tend to be the most valuable: they first attack short-term gains, which are taxed at ordinary income rates rather than the lower long-term rates.

The wash-sale question

For stocks, buying a substantially identical security within 30 days either side of the sale disallows the loss. Because the IRS treats crypto as property rather than a security, that rule has not historically applied to directly held digital assets - which is why crypto harvesting is often described as unusually flexible. Treat this as a live issue rather than settled ground: legislation to extend wash-sale treatment to digital assets has been proposed repeatedly, tokenized securities may be treated differently, and the economic substance doctrine remains a general backstop against transactions with no purpose beyond the tax result. Check the current position before relying on it.

One more trade-off worth understanding: rebuying at the lower price resets your cost basis down and restarts the holding period. Harvesting often defers tax rather than erasing it - which is usually still worth doing, especially against short-term gains, but it isn't free money.

1. Enter the gains you've already realized this year, split into short-term and long-term, plus the rates that apply to you and any loss carried in from prior years.
2. Add every underwater position you still hold: asset, quantity, total cost basis, current value, and whether it's held short or long term.
3. Tick the ones you'd actually sell. The table shows each position's unrealized loss and which gain bucket it attacks first - short-term losses are usually worth more.
4. Read the netting. The board walks through gains before and after, what reaches ordinary income, and what carries forward - with the tax difference as the headline.

Use it before year-end: losses have to be realized by December 31 to count for that tax year. Export the plan as CSV so you have a record of which lots you intended to sell and why.