Can You Write Off Crypto Losses?

Crypto goes down as well as up. The good news: losses are not just painful — they can reduce your tax bill if you handle them correctly. Here is how losses work in the US and Canada for 2026.

Losses offset gains first

The core principle in both countries: capital losses offset capital gains. If you realized $6,000 of gains and $2,000 of losses in the year, you are taxed on $4,000 of net gain, not the full $6,000.

United States: extra benefits

• Net capital losses can offset capital gains fully.
• If losses exceed gains, you can deduct a limited amount against ordinary income each year.
• Remaining losses carry forward to future years indefinitely.

The wash-sale question

For stocks in the US, the wash-sale rule blocks claiming a loss if you rebuy the same security within 30 days. The application of this rule to crypto has been a moving target. Because rules can change, do not build a strategy around rapidly selling and rebuying the same coin without checking the current law with a professional.

Canada

In Canada, since only 50% of a gain is taxable, only 50% of a loss is deductible (an “allowable capital loss”). It offsets taxable capital gains; unused losses can generally be carried back or forward under CRA rules. Canada also has a superficial loss rule similar in spirit to the US wash-sale concept.

You must still report losses

A common mistake is not reporting a loss year because “there is no tax owed.” But reporting losses is how you bank them to offset future gains. Skipping it can mean leaving money on the table later.

Bottom line

Losses offset gains and, in the US, some ordinary income, with carryforwards available. Always report them even in down years. Enter your gains and losses in the calculator below to see the net effect, then confirm carryforward details with an accountant.