Let’s start with this: You are not cheating when you use a loophole.
The Merriam-Webster dictionary deﬁnes “loophole” as a means of escape.
In its second deﬁnition of a loophole, Merriam-Webster says it’s a small opening to admit light and air or to permit observation.
When it comes to tax losses on bitcoin and other cryptocurrencies, you’ll ﬁnd in this article an escape from a tax-loss rule that does not allow you to deduct a tax loss. Yes, you read that right! The tax code has rules that don’t allow current deductions for tax losses.
In IRS Focuses on Cryptocurrency: Are You Ready? I explained ...