How Cryptocurrencies Are Taxed in the U.S., U.K., and Canada: A Comparison of Rules on Gains, Losses, and Loss Harvesting
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In the U.S., U.K., and Canada, crypto is taxed as property, subject to capital gains tax. Losses can offset gains and income, with limits.
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Crypto losses in the U.S. are capital losses. Net losses up to $3k can offset income. Excess losses carry forward.
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In the U.K., crypto losses offset capital gains. Remaining losses carry forward to future years. No direct offset against income.
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Canada allows crypto losses to offset capital gains in the current and previous 3 years. 50% of remaining losses carry forward.
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All 3 countries have rules against tax loss harvesting through wash sales of crypto. Losses must be realized through sales or trades.