Wash sale
Also known as: wash sale rule
Selling an asset at a loss and quickly repurchasing it. Some jurisdictions defer or disallow the loss, and the rules for crypto vary widely.
Definition
A wash sale is selling an asset to realise a loss, then buying it back shortly after to keep your position. In the US, the wash-sale rule disallows the loss on securities, though its application to crypto has been uncertain. The UK addresses similar behaviour with same-day and 30-day matching. The SARS draft Guide to the Taxation of Crypto Assets (1 July 2026) treats crypto assets as financial instruments, so paragraph 42 of the Eighth Schedule applies on capital account. If you dispose of a crypto asset at a capital loss and acquire an identical crypto asset within 45 days before or after the disposal, the proceeds are deemed equal to the base cost, so the capital loss is deferred rather than allowed. That deferred loss is added to the base cost you incur on the replacement asset. The rule can also apply where certain connected persons make the reacquisition. Traders on revenue account fall outside paragraph 42, which is a capital-account rule. This is guidance based on a SARS draft and does not create settled law.
Example
You sell BTC at a loss on 1 March and rebuy the same amount on 2 March purely to claim the loss while keeping exposure. Under paragraph 42 the capital loss is deferred into the base cost of the rebought BTC.
Jurisdiction notes
- South Africa: On capital account, paragraph 42 of the Eighth Schedule can defer a capital loss where an identical crypto asset is acquired within 45 days before or after the disposal, per the SARS draft guide. The deferred loss is added to the base cost of the replacement asset. Revenue-account traders fall outside paragraph 42.
- United Kingdom: HMRC uses same-day and 30-day matching to counter bed-and-breakfasting rather than a US-style wash-sale rule.