The US rule as it stands
Does the US rule cover crypto? Its words don’t. Section 1091 of the Internal Revenue Code is titled “Loss from wash sales of stock or securities”, and it refuses the deduction when substantially identical stock or securities are bought within 30 days either side of the loss sale.
The official US Code text, read on November 8, 2026 and current through Public Law 119-138 of November 3, has no digital asset wording at all, and its last amendment dates from 2002.
Crypto, meanwhile, is property in the eyes of the IRS, which is the first answer in Notice 2014-21. So the law as written has not been extended to crypto.
Four countries compared
Elsewhere the answer changes. The table sets out how a quick buy-back after a crypto loss is handled in four tax systems.
| Country | Quick buy-back after a loss | Legal basis |
|---|---|---|
| United States | Statute names stock or securities only, no digital asset wording | 26 U.S.C. 1091; IRS Notice 2014-21 (crypto as property) |
| United Kingdom | Same token bought in the next 30 days? The sale is matched to that purchase | TCGA 1992 s106A; HMRC CRYPTO22200 |
| Canada | Identical property bought 30 days either side, still held at the end: loss denied for now, added to the new cost | Income Tax Act s54 and 40(2)(g)(i) |
| Australia | No set window; loss can be canceled as tax avoidance | ITAA 1936 Part IVA; ruling TR 2008/1 |
HMRC’s crypto pages send readers to its capital gains manual for detail, and that manual calls this the “bed and breakfast” rule, introduced in 1998. In Canada the loss is deferred rather than lost. The CRA’s capital losses page says the person who acquires the replacement property can usually add the superficial loss to its adjusted cost base.
That page states the rule for capital property in general, and the CRA’s crypto-asset guidance refers capital disposals of crypto to its general capital gains guide. Australia’s tax office named crypto directly in a June 27, 2022 release, saying its data analytics draw on records from crypto asset exchanges and that a wash sale’s capital loss is rejected.
What the UK rule does to a loss
The common mistake is assuming the US position holds everywhere. HMRC’s worked example shows what happens instead. An investor called Rachel holds 2,000 units of a token, pooled at a cost of £1,000, and sells 1,000 of them for £400 on March 31. She buys 700 back for £175 on April 21 and 500 more for £100 on April 28.
Because those purchases fall within 30 days, HMRC matches the sale to them, 700 units at £175 plus 300 of the 500 costed at £60 (the other 200 go to a second sale she made on April 20), and reaches a gain of £165.
Had the sale come out of the pool instead, half the £1,000 cost would have applied, which by our arithmetic gives a £100 loss. A loss becomes a gain. In the US, the cost used for a crypto sale turns instead on which units count as sold, the subject of specific identification.
This entry is general information and is not tax advice. Because the US position rests on the statute’s present wording, check section 1091 at the official US Code site before relying on it for a sale.