Compensation for losses in cryptocurrencies in personal income tax
The crypto market is volatile and losses are frequent. The good news: cryptocurrency losses can offset other gains and legally reduce your tax bill.
What type of loss does a crypto sale generate?
Gains and losses from the transmission of cryptocurrencies are property gains or losses that are integrated into the savings tax base.
What can be compensated?
General rule
Capital losses (from crypto or other assets) are first offset by capital gains from the same year. If there is a negative balance left, you can offset up to 25% of the positive balance of capital gains from the same year.
Example:
- Capital gains: €5,000
- Asset losses (crypto): -€8,000
- Net balance: -€3,000
- Income from movable capital (dividends, interests): €4,000
- Possible compensation: 25% × 4,000 = €1,000
- Tax base of savings reduced by €1,000
- Remaining uncompensated losses: -3,000 + 1,000 = -€2,000 (carry over 4 years)
Transfer to future years
Losses not compensated in the year can be carried forward to the 4 following years, with the same compensation rules.
The "tax loss harvesting" strategy in crypto
Tax loss harvesting consists of realizing latent losses before the end of the fiscal year to offset realized gains.
Example:
- You have earned €10,000 selling ETH in 2025.
- You have BTC with a latent loss of €6,000 (you bought it at a high price and now it is worth less).
- If you sell the BTC before December 31, you realize the loss.
- Your net taxable profit is reduced to 10,000 - 6,000 = €4,000.
- Tax savings: 6,000 × 19% = €1,140 approximately.
Can you repurchase immediately?
In Spain, unlike the US (where the "wash sale rule" exists), there is no rule that prevents repurchasing the same asset immediately after selling to realize losses.
This means you can:
- Sell BTC on December 30 to realize the loss.
- Repurchase BTC on December 31 at the same price.
- Declare the loss in personal income tax.
The cost of acquiring the new BTC will be set at the repurchase price.
Losses in stablecoins: compensable?
If you buy USDC at €1 and sell it at €0.98 (due to exchange rate differences or small depeggings), the loss of €0.02 per unit is compensable.
Losses due to exchange bankruptcy (FTX, etc.)
If an exchange where you have crypto goes bankrupt:
- Losses are real but are only deductible when you can prove that you will not recover the funds.
- You need a supporting document (bankruptcy procedure, ruling, communication from the exchange).
- They are declared as a capital loss when the certainty of the loss materializes (not when the exchange closes, but when the definitive bankruptcy is confirmed).
Losses due to scam and phishing
Similar to bankruptcy: you need to prove that the funds are not recoverable. With a police report and documentation of the recovery attempt, the AEAT can accept the loss.
Common errors
- Not declaring losses: Many taxpayers do not file losses thinking that "you don't have to declare if you don't win." Error: Losses must also be declared in order to be compensated.
- Forget the 4-year period: Losses from 2021 can only be compensated until 2025.
- Do not record the acquisition cost: Without it, the Treasury can consider the cost zero and monetize all sales as profit.
Updated: April 2026 | Fiscal year: 2025