Crypto Year-End Tax Planning 2026 – What to Do Before December 31

The most important crypto tax moves must happen before December 31. Here is a complete year-end action plan to legally minimize your crypto tax bill.

Why December 31 Is the Hard Deadline

For US crypto taxes, the tax year is January 1 – December 31. Any crypto sold, traded, or transferred after midnight on December 31 counts toward next year. All tax planning actions must be completed before this date.

Action 1: Harvest Tax Losses (Before Dec 31)

Review your entire portfolio for unrealized losses. Sell losers before December 31 to realize losses that offset your gains. Unlike stocks, there is no wash sale rule for crypto – you can immediately repurchase the same coins.

Deadline: Trades must settle by December 31. Place orders by December 28–29 to ensure settlement.

Action 2: Check Your Holding Periods

For each crypto holding with a gain, check if it crosses 12 months soon. If BTC bought on December 15, 2025 would become long-term on December 16, 2026 – wait the extra day before selling. The tax savings can be thousands of dollars.

Action 3: Realize Gains in Low-Income Years

If your taxable income is low this year (under $94,050 MFJ or $47,025 single), you may qualify for the 0% long-term capital gains rate. Sell appreciated crypto before December 31 to lock in gains at 0%. This is a legal way to "reset" your cost basis to a higher level.

Action 4: Max Out Retirement Contributions

• Traditional IRA: Contribute up to $7,000 ($8,000 if 50+) – deduction reduces taxable income
• Solo 401(k): Contribute up to $69,000 if self-employed
• SEP-IRA: Up to 25% of net self-employment income

These reduce your taxable income, potentially dropping you into a lower capital gains bracket.

Action 5: Donate Appreciated Crypto to Charity

Donating long-term appreciated crypto directly to a registered charity by December 31 gives you: a deduction for the full FMV + zero capital gains tax. Far more tax-efficient than selling and donating cash.

Action 6: Gift Crypto to Family

Gift appreciated crypto to family members in lower tax brackets. Each person can give up to $18,000 (2026) to any individual without gift tax. Recipients in the 0% LTCG bracket can sell the crypto tax-free.

Year-End Checklist

• ☐ Identify all unrealized losses – harvest before Dec 31
• ☐ Check holding periods on large gains – wait for long-term if close
• ☐ Estimate taxable income – check if 0% LTCG rate applies
• ☐ Max retirement account contributions
• ☐ Donate appreciated crypto if philanthropically inclined
• ☐ Export all transaction records for your crypto tax software

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