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Crystallise a loss to offset profitable trades?

  • 03-06-2024 1:44pm
    #1
    banie01
    Registered Users, Registered Users 2 Posts: 17,155 ✭✭✭✭


    Hi Folks,

    Looking for some opinions on whether this is a worthwhile effort. I am doing quite well in my equity portfolio currently versus the disaster that my non-BTC crypto portfolio has become.

    I'm thinking of selling out of biggest crypto loser to offset the tax due on a small disposal of part of my equities. e.g crystallise a 30k loss in crypto to offset a 30k gain in a stock position.

    I know it'll likely lead to an audit to check my sums, opening positions and so on but, I think it's a worthwhile tactic? Or am I missing something obvious?



Comments

  • #2
    Geuze
    Registered Users, Registered Users 2 Posts: 13,932 ✭✭✭✭Geuze


    I did this, on a much smaller scale than you.

    I had experienced 99% losses on bank shares bought during 2008-2010, with no hope of ever breaking even, so I sold them to use the capital loss against a capital gain made the same year on other shares.

    Maybe post the query on AAM to get answers from professionals in finance.



  • #3
    SureYWouldntYa
    Registered Users, Registered Users 2 Posts: 7,794 ✭✭✭SureYWouldntYa


    It would be worthwhile especially if it's a position that won't recover into a profit in the near future. You can't offset losses backwards, only utilise in current year and then brought forward if excess losses. It wouldn't make sense to pay tax on a gain in 2024 to then liquidate a loss in 2025 that perhaps you cannot utilise in future years.



  • #4
    banie01
    Registered Users, Registered Users 2 Posts: 17,155 ✭✭✭✭banie01


    https://www.boards.ie/discussion/comment/122218103#Comment_122218103

    That's pretty much my own thinking too. I'm mulling it over a while and the current skew in my unrealised profits in equities V unrealised crypto losses have me thinking I might not ever have a chance to benefit this much from loss farming again.

    I'd likely also be able to back into my crypto position too as, despite the current state of the investment there, I really do see future upside.

    https://www.boards.ie/discussion/comment/122217318#Comment_122217318

    Thanks Geuze, appreciate the info. I'm currently digging out my trade history and sorting out my buy-in prices as I'd expect to have the losses queried at least.



  • #5
    cnocbui
    Registered Users, Registered Users 2 Posts: 20,175 ✭✭✭✭cnocbui


    I have done this with equities - sold out of a long time negative position to offset gains on a winner. Gives me a larger balance with which to fund the next dividend earner. I'm eyeing up just such a pairing of trades at the moment.



  • #6
    banie01
    Registered Users, Registered Users 2 Posts: 17,155 ✭✭✭✭banie01


    I crystallised the loss this afternoon. Down 93% from my BEP. Oddly not at all bothered by the final number as I can at least offset against other far more profitable positions. I'll likely reopen a position again in 28days hopefully at price lower than I sold at🤣



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