Anyone who sells a bitcoin position at a loss in order to use that loss for tax purposes, and buys the same quantity back shortly afterwards, triggers two things at once in Germany. The loss
Anyone who sells a bitcoin position at a loss in order to use that loss for tax purposes, and buys the same quantity back shortly afterwards, triggers two things at once in Germany. The loss is realized and remains deductible. At the same time, the one-year holding period starts again from scratch for the quantity bought back. That is the price of the decision, and it hangs on a single date: the acquisition date of the new units.
The occasion is this week's slide. On September 17, 2026, Bitcoin stood at $76,555, or €66,712, and Ethereum at $2,453 and €2,138. Cryptoticker.io retrieved these figures on the same day through CoinGecko's public price interface. Many positions opened over the past year are therefore under water, and the question of whether to take the loss and get straight back in is coming up in a great many German portfolios at the same time.
In Germany, crypto assets count as other economic assets. Selling them therefore falls under private disposal transactions in section 23 of the Income Tax Act, not under the flat withholding tax. That sounds like a technicality, but it determines everything that follows.
A private disposal transaction is a sale within one year of acquisition. The gain from it is taxed at your personal income tax rate, and in return the loss from it can be offset. Anyone who sells after the year has elapsed stays tax-free, and that cuts both ways: the gain goes untaxed, but the loss is equally without effect.
That second half is routinely overlooked. A position bought eighteen months ago and sitting 30 percent under water today no longer carries any usable tax loss. That position is outside the period. Selling it brings nothing except liquidity.
For each individual lot in your holdings, three pieces of information count: the acquisition date, the acquisition cost and the quantity. The acquisition date tells you whether the one-year period is still running. The acquisition cost tells you whether there is a loss at all. The quantity tells you how much of it you can move without touching other lots. Crypto tax software with portfolio tracking shows you these three values separately for each purchase, and without them the decision about a loss sale cannot be taken cleanly.
The holding period is the time between the acquisition and the disposal of a particular unit. That period attaches to the unit, not to the coin and not to the account. Every purchase starts its own clock.
From this follows the central point of this article. If you sell 0.3 bitcoin today that you bought in January 2026, and buy 0.3 bitcoin again ten minutes later, you have not restored the same position. You have a new position with a new acquisition date. The old eight months of holding time are not transferable; they were used up by the sale. The new unit does not become tax-free until September 2027.
On a position that is only a few weeks old anyway, this costs almost nothing. On a position that would have reached the one-year mark in three months, it costs those three months plus another twelve. That is the real calculation, and it comes out differently for every lot.
With every buyback, a fresh one-year period starts for the newly acquired units.
No. Under US tax law, a wash sale is a loss-making sale in which the same or a substantially identical security is bought back within thirty days before or after the sale. Section 1091 of the Internal Revenue Code denies the deduction of the loss in that case; it is added to the cost basis of the new position instead.
German income tax law has no equivalent for private disposal transactions. Section 23 contains no blocking period for re-entry, and there is no provision that shifts the loss into the new acquisition cost. The loss stays where it arose, in the year of the sale.
Anyone reading American guides or using an international tax tool should know this difference before deriving rules for the German tax office from them. The thirty-day window that regularly appears in such texts has no bearing on a German tax return.
That leaves the objection tax offices occasionally raise in such cases: abuse of legal structuring. Under section 42 of the German Fiscal Code, this exists where a legal arrangement essentially serves to obtain a tax advantage not provided for by law.
There is a decision directly on point, and it concerns precisely the provision discussed here. In a judgment of August 25, 2009, case reference IX R 60/07, the Federal Fiscal Court held that there is no abuse of structuring where a taxpayer sells securities at a loss within the one-year period and buys back securities of the same type and number at a different price on the same day. Sale and buyback, the court held, are to be assessed as separate transactions. The matter in dispute was a private disposal transaction under section 23, that is, the same provision crypto assets fall under today.
The judgment was handed down on shares and not on crypto assets, and it is not a blank cheque. It is, however, the closest thing to a supreme court statement on this constellation, and it supports the view that re-entry as such does not endanger the loss. Anyone wanting full certainty should have the case reviewed by a tax adviser before filing; a binding ruling from the tax office is the only route to genuine legal certainty in an individual case.
FIFO stands for first in, first out and means that the unit acquired first counts as the one disposed of first. For crypto assets, the German Federal Ministry of Finance set out this consumption order in more detail in its circular of March 6, 2025, together with the record-keeping and cooperation duties attached to it. The circular carries the file number IV C 1 - S 2256/00042/064/043 and replaces the version from May 2022. It is publicly available from the Federal Ministry of Finance.
In practice that means your purchases stand in a line, ordered by date. When you sell, the line is cleared from the front. The buyback joins the end of that line.
This creates a trap that springs particularly often in a drawdown. The units at the front of the line are the oldest, and therefore often the ones with the longest holding time and the best tax position. Anyone triggering a partial sale in order to realize a loss reaches, under FIFO, for exactly those old units first, and those may well not be under water at all. A loss sale that hits the wrong lot produces a taxable gain instead of a usable loss.
The wording of the law can be read in the full text of section 23 of the Income Tax Act. The consumption order can only be controlled cleanly if holdings are kept separately per wallet and per exchange account, because under the ministry circular the assessment is made in principle per individual wallet or per individual account. Anyone holding the same coin on three platforms has three separate lines and not one shared one. Which exchange gives you which export formats differs considerably; a look at our crypto exchange comparison is worth the time before you plan a loss sale spanning several accounts.
The decision can be boiled down to one question: which is worth more, the loss today or the remaining holding time?
On a lot that is only two months old, the answer is usually clear. Ten months of remaining period is a manageable stake, and the loss takes effect immediately. On a lot that is eleven months old, the picture flips. One month separates it from tax exemption; a buyback resets it to twelve months and extends the window in which a later gain would be taxable by eleven months.
On top of that comes a point easily lost in the arithmetic: a loss is only worth something if a gain from a private disposal transaction stands against it in the same year or in a later one. Losses under section 23 land in their own offsetting pot. They cannot be set against employment income, rental income or investment income from shares. Anyone not expecting corresponding gains realizes a loss that sits unused for years. We set out the mechanics of this offsetting and the deadlines in detail in our article on crypto losses before the one-year period expires of September 9, 2026.
Under FIFO, a sale always consumes the front unit, meaning the oldest one.
An exemption threshold is a limit at which the entire amount becomes taxable once it is exceeded, not just the excess. For private disposal transactions it stands at €1,000 of total gains in a calendar year.
For the buyback decision this means two things. If your annual gain from private disposal transactions stays below the threshold anyway, an additionally realized loss is worthless for tax, because there is nothing to reduce. And conversely: if you are just above the threshold, a targeted loss sale can push the total gain below €1,000 and thereby make the entire amount tax-free. That is the only case in which a loss sale pays off in a jump rather than proportionally.
A draft bill on the future taxation of crypto assets is on the table, providing for a switch to the flat withholding tax from 2027 and for grandfathering of holdings acquired before then. It is a draft and not applicable law; none of it has been adopted, and the cut-off date may move or disappear entirely.
But if it does come to pass, the acquisition date takes on a second meaning beyond the one-year period. Units you buy back today would have been acquired before the cut-off date. Units you only buy back in January would not. Anyone already weighing a loss sale with a subsequent buyback therefore has an argument for not pushing it into next year. We gathered the state of the draft and the open questions in our piece on the holding period and grandfathering of September 8, 2026.
What matters is the order of certainty: the one-year period applies today and is law. Grandfathering is an expectation. A decision resting on the expectation alone stands on one leg.
The ministry circular of March 6, 2025 framed the record-keeping and cooperation duties considerably more sharply than its predecessor. For a loss sale with a buyback this means, concretely: both transactions must be individually documented, with time, quantity, price and platform.
In practice you need the exchange's transaction export for the sale and for the buyback, each with a timestamp. If the position came from your own wallet, proof of origin is required on top. A statement showing the holding only as a total is not enough, because the one-year period attaches to the individual lot.
Export the data promptly. Anyone who discovers after a delisting, an account closure or a change of provider that the history is no longer retrievable has lost the proof and with it the loss. That is not a theoretical risk: in the past few weeks alone, several trading venues have set deadlines for withdrawing balances, after which the account interface was no longer reachable.
The amounts below are freely chosen worked examples and not a price forecast. The cases only show how the variables interact.
Case one, a young lot at a loss. Bought in July 2026 for €8,000, current value €6,400. Loss €1,600, remaining period around ten months. A sale with an immediate buyback realizes the loss and resets the clock to twelve months. Anyone with gains from other crypto sales in the same year comes out clearly ahead here.
Case two, an old lot just short of the finish line. Bought in October 2025 for €10,000, current value €8,500. The loss of €1,500 is real, but the period runs out in a few weeks. A buyback trades an almost achieved tax exemption for a loss that is only worth something if there are enough offsettable gains. In most portfolios, waiting is the calmer option here.
Case three, a lot outside the period. Bought in February 2025, current value well below. Nothing happens for tax on a sale, neither a gain nor a usable loss. A sale here is a pure investment decision with no tax effect. We worked through a similar constellation on the gains side for Ethereum profits and the holding period on September 14, 2026.
(As of September 17, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)
