Consider these 3 smart crypto tax moves regardless of price fluctuations.

• Amid political and economic uncertainty, it's challenging to predict future cryptocurrency prices, but experts suggest that you can still make smart tax moves.
• Resetting original purchase prices could be a chance to harvest gains if earnings are lower.
• Experts suggest that crypto investors can still take advantage of the crypto wash sale loophole while incurring losses.

Despite the unpredictability of future cryptocurrency prices due to political and economic instability, it is still possible to make wise tax decisions, according to experts.

While investors anticipate interest rate updates from the Federal Reserve and evaluate former President Donald Trump's policy suggestions, the price of Bitcoin was approximately $65,856 at midday on Tuesday, and Ethereum was trading at $3,310.97, according to Coin Metrics.

In early July, the price of bitcoin reached a two-month low, following the Fed's announcement that it was not yet prepared to reduce interest rates.

Bitcoin has experienced a more than 50% increase in value this year, and investors should be aware of key crypto tax rules. Home insurance premiums increased by 21% last year, with climate change being a contributing factor. The Fed is set to cut interest rates, and homeowners and buyers should take note of the implications.

Experts suggest considering these key crypto tax strategies regardless of whether prices rise or fall.

1. Weigh 'tax gain harvesting'

Although the crypto market has experienced recent declines, long-term investors may still see substantial profits. As of mid-day on July 30, the price of bitcoin had increased by approximately 49% year-to-date, while the price of ether had grown by about 40%.

If you anticipate a lower-income year in 2024, it may be advantageous to engage in tax gain harvesting or strategically sell profitable cryptocurrency while in the 0% long-term capital gains bracket. Long-term capital gains tax rates apply to assets held for more than one year.

Your "taxable income" is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income, and these rates apply to it.

Spreading earnings across multiple years is a tax-efficient strategy, as advised by Andrew Gordon, a tax attorney, certified public accountant, and president of Gordon Law Group.

Consider the tax implications of increasing your adjusted gross income through cryptocurrency gains, which may affect other tax deductions.

2. Reset your purchase price

Experts suggest that harvesting gains and then immediately repurchasing an asset could reset the original purchase price, thereby reducing future taxes.

If you anticipate higher income in the future and want to maintain your position, it could make sense to keep your strategy even at the 15% long-term capital gains bracket, advised Adam Markowitz, an enrolled agent at Luminary Tax Advisors in Windermere, Florida.

Some investors face an additional 3.8% tax on capital gains if their modified adjusted gross income (MAGI) exceeds $200,000 for single filers or $250,000 for married couples filing together.

3. Consider the crypto wash sale 'loophole'

Tax-loss harvesting can help offset other investing profits if you're sitting on crypto losses. Once losses exceed gains, you can use the excess to reduce regular income by up to $3,000 per year.

According to Gordon, it is more advantageous to harvest crypto losses throughout the year rather than at the end because "those losses may no longer exist."

The wash sale rule typically applies to investors, preventing them from claiming a tax break if they repurchase a "substantially identical" asset within a 30-day window before or after the sale.

Currently, the wash-sale rule does not apply to cryptocurrency, allowing you to offset losses by immediately repurchasing to maintain your position.

"Markowitz stated, "The IRS presents us with this loophole; we might as well utilize it.""

Despite previous Congressional attempts to repeal the crypto wash sale rule, there is still a possibility of changes occurring.

If Congress does not act, the tax breaks enacted by Trump will expire after 2025. The crypto wash sale rule could be revisited as lawmakers search for funding to extend critical provisions, experts suggest.

"It may be wise to use it now before it disappears," Gordon suggested.