Yes. Tax loss harvesting (TLH) is available to Swan clients.
The Strategy: We identify specific tax lots currently held at a loss—whether at Swan or elsewhere—and sell them to lock in a capital loss. We then immediately repurchase the Bitcoin.
Please contact your Swan Private representative to start the process, or reach out here if you would like to know more.
The Benefits:
- Offset Capital Gains – Use realized capital losses to offset capital gains from any asset class (equities, real estate, etc) this year or in any and all future years.
- Offset Income – Deduct up to $3,000 against ordinary income annually.
- Rotate assets – You can also rotate assets from Bitcoin ETFs, Bitcoin Mining stocks, and other assets into real Bitcoin with Swan to lock in losses.
- Carry Forward – Unused losses carry forward indefinitely to offset future profits.
Why this works uniquely for Bitcoin: The "Wash Sale Rule"—which typically disallows a loss if you repurchase the same security within 30 days—does not currently apply to Bitcoin. This allows you to book a capital loss instantly, without being out of the market.
Here’s how it works:
- Identify how much Bitcoin you purchased currently held at a loss, from Swan or anywhere else (if purchased on Swan, we can help with these calculations)
- Sell that lot of BTC and immediately rebuy the same amount (we would execute the sale and re-buy for you)
- You retain your Bitcoin position but realize a capital loss for tax purposes
- That loss can offset future capital gains indefinitely, or up to $3,000/year in ordinary income
Additional Notes
- You can transfer Bitcoin from cold storage or from an exchange like Coinbase to Swan to execute a tax loss harvesting transaction.
- Tax loss harvesting only applies to taxable accounts (IRA accounts do not qualify)
Reporting: Following the sell and rebuy, you will see a record on your dashboard, as well as on your statements page. In the following year, you will receive a 1099 form from our custodian, documenting the sale (more info here).
Interested? Let's get in touch
If you’d like to discuss how to execute TLH please contact your Swan Private representative to start the process, or reach out here.