Wash sale
Also known as: wash sale rule
Selling an asset at a loss and quickly repurchasing it; some jurisdictions disallow the loss, though 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. South Africa has no dedicated crypto wash-sale rule, but the general anti-avoidance rules and the requirement that a loss be genuine still apply.
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 — a classic wash-sale pattern.
Jurisdiction notes
- South Africa: No specific crypto wash-sale rule in South Africa, but general anti-avoidance principles and the substance of the loss still apply.
- United Kingdom: HMRC uses same-day and 30-day matching to counter bed-and-breakfasting rather than a US-style wash-sale rule.