The Market Has Created a Rare Tax Opportunity (Most Will Miss It)
Tax strategy is a large portion of what we do at the family office.
And most of the time, it isn’t exciting.
It’s complicated.
It’s time-consuming.
And the planning we do today is often designed to reduce taxes years down the road.
That’s the nature of real strategy. The biggest wins usually come from decisions that feel boring in the moment.
But every now and then, the market creates something different.
An opportunity that doesn’t require waiting years to see if it worked. An opportunity that isn’t built on complex structures or aggressive assumptions. An opportunity that exists simply because of how different assets are behaving right now.
We’re in one of those moments.
Stocks have been the winner. Bitcoin has been the loser. And when those two things line up at the same time, there is a powerful tax-planning opportunity hiding in plain sight.
The Part Most People Miss: Taking Chips Off the Table Isn’t Free
After a strong year in the markets, it’s natural to want to take chips off the table.
You’ve had a big win.
You want to de-risk.
You want to rebalance.
Or maybe you just want to move on from an investment that’s done its job.
But selling assets creates a taxable event - and in many cases, the tax consequences matter more than the return on the quarterly statement.
This is where people get stuck.
They want to sell appreciated assets, but they hesitate because they don’t want to write a large check to the IRS. So they delay decisions, hold assets longer than they want to, or make investment choices driven by taxes instead of logic.
That hesitation is rational… but, it is costly.
That’s exactly where the current setup becomes interesting.
This opportunity applies if:
You already sold assets for a gain this year, or
You want to sell appreciated assets, but have been holding off purely because of the tax consequences
When you have a loss available to pair with a gain, the entire decision-making process changes.
The Overlooked Financial Principle: Assets Don’t Live in Isolation
At Grand Vision, we don’t ask, “Did this investment go up or down?”
We ask, “How does this asset interact with the rest of the balance sheet?”
Most people manage investments individually. Wealth is built by managing interactions - especially tax interactions.
Right now, the interaction between stock gains and Bitcoin losses is unusually efficient.
Tax-Loss Harvesting (Quick Review)
Tax-loss harvesting simply means turning a paper loss into a real one so it can be used on your tax return.
If you have an investment that has lost value but you still own it, the IRS doesn’t recognize that as a loss.
But, once you sell the investment, it becomes realized - and realized losses can offset realized gains.
That concept isn’t new.
What is different is how Bitcoin fits into the equation today.
Why Bitcoin Is a Special Tool Right Now
Normally, tax-loss harvesting forces a tradeoff.
You sell an investment to realize a loss…
…but you still want to own it long term.
With stocks, buying that stock back too quickly can trigger an IRS exception called wash sale rules: You can’t recognize the loss on your tax return if you repurchase that same stock within 30 days. That means choosing between tax efficiency and staying invested.
Bitcoin (and some other cryptocurrencies) currently operate under a different framework.
Under current U.S. tax law, spot Bitcoin is treated as property, not a security. Wash sale rules apply to stocks and securities. As of today, they generally do not apply to spot cryptocurrency.
That allows you to:
Sell Bitcoin at a loss
Buy it back immediately
Keep the tax loss and your market exposure
This “no forced time out” is what makes the current moment so powerful.
Important nuance: This applies to holding actual Bitcoin. Bitcoin ETFs are securities, and wash sale rules do apply to them.
How the Strategy Works Step by Step
Step 1: Confirm the Setup Exists
This strategy works best if you have:
Realized capital gains, or assets you want to sell for a gain
Unrealized Bitcoin losses (Bitcoin below your cost basis)
All of this must occur in a taxable account.
Step 2: Decide How Much Loss to Harvest
One option is to harvest just enough Bitcoin losses to offset gains that are already realized.
Another is to intentionally harvest more, creating losses to use against future gains or carry forward.
There is no “right” amount - only a strategic amount.
Step 3: Sell Bitcoin to Realize the Loss
The math is simple:
Sale price – cost basis = capital gain or loss
If Bitcoin is below what you paid, selling it converts a paper loss into a real one.
Step 4: Buy Bitcoin Back (If You Want to Stay Invested)
Because wash sale rules generally don’t apply to spot crypto under current law, you can typically repurchase Bitcoin immediately.
You keep your exposure without guessing where the market will be in 31 days.
Step 5: Use the Loss to Offset Gains (or Income)
Capital losses first offset capital gains.
But here’s the part most people overlook:
Even without capital gains, you can deduct up to $3,000 of capital losses against ordinary income each year, with the remainder carried forward. A very simple move that equates to a $3,000 deduction.
A Simple Example (Ordinary Income)
If you’re in the 32% tax bracket, a $3,000 deduction saves:
$3,000 × 32% = $960 in federal taxes
That’s nearly $1,000 of real cash savings - even if you had no capital gains to offset.
This is why losses are not useless. They are assets when used correctly.
Another Example: Why “Small” Tax Rates Aren’t Small at All
Let’s look at long-term capital gains. Assume:
You realize $50,000 of long-term capital gains
You’re in the 15% long-term capital gains bracket
Without any offset, that’s:
$50,000 × 15% = $7,500 in federal capital gains tax
Now imagine you harvest $50,000 of Bitcoin losses.
That $7,500 tax bill drops to zero.
Same portfolio. Same exposure. Very different tax outcome.
While the strategy itself sounds simple, the savings are not. Reducing taxes by thousands of dollars without changing market exposure adds up to real dollars in your pocket, especially when repeated over time.
This is the type of coordination we focus on inside the family office - we manage investments and taxes as one equation -because real wealth is built on what you keep, not what you make.
Why This Isn’t Just an “End-of-Year” Strategy
A loss harvesting strategy is often discussed in December, but it isn’t limited to year-end.
It works whenever the setup exists.
That said, for this unique set up, waiting introduces a different kind of risk: rule risk.
There have already been proposals to extend wash sale rules to digital assets. If those rules change, this strategy could disappear entirely.
So while this isn’t a December-only move, it is a current-law opportunity. And current-law opportunities don’t usually announce when they’re about to close.
The Takeaway
Most people obsess over returns but ignore taxes… and that mistake quietly costs them more than a bad investment ever will.
Why? Because most people treat investing and tax strategy like they’re separate games. They’re not. Real wealth is built by controlling both variables: what you earn, and what you keep.
And most of the time, the market forces a tradeoff:
stay invested or get the tax benefit
take chips off the table or swallow the tax bill
That’s what makes rare windows like this so valuable. When one asset is clearly the winner and another is clearly the loser, you can pair them and let the math do the heavy lifting.
And here’s the part people underestimate: this strategy is simple, but it isn’t small. In the right setup, it can save thousands in taxes without forcing you to change your long-term portfolio allocations or sit out of the market.
That’s the real lesson: Taxes aren’t something you “deal with.” They’re something you design your financial strategy around.
Because once December turns into January, you don’t get a redo… you get a receipt.
—Mike Neubauer
Founding Partner, Grand Vision Family Office
P.S. If you’d like to learn more about me, and
why I take the time to write these articles,
I shared a bit more on this page:
GrandVision.co/why-i-write
P.S. Real Estate, Gold, and Private Investments
A capital loss harvested in Bitcoin can offset capital gains from many asset classes: stocks, gold, private investments, and real estate (when it’s a taxable capital gain). That’s why this “winner + loser” window matters beyond just the S&P 500.
A lot of people finish the year with a big win somewhere - maybe a property sale earlier this year, or a private investment that paid out this year - and they just accept the tax bill as the cost of doing business.
If you already realized gains in another asset class this year, a properly executed Bitcoin loss harvest can be the simplest way to reduce the tax damage across multiple asset classes.
P.P.S Unexpected Risks and Diligence
This strategy applies to actual cryptocurrency holdings, not ETFs. ETFs are securities, and wash sale rules can apply to them just like stocks. Also, while crypto trading costs are usually small, buying and selling still involves fees, spreads, and minor price movement - those costs need to be acknowledged upfront.
Most importantly, bookkeeping matters. Crypto is treated as property, and each lot has its own cost basis. You want to be certain you’re selling Bitcoin (or other cryptocurrency) at a price below its actual basis, otherwise the loss you think you’re harvesting may not exist. Clean records and coordination with your CPA turn this from a good idea into a defensible strategy.
*Because common sense isn't always 'common', here is the legal disclosure: This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Grand Vision Family Office LLC and its affiliated entities do not guarantee the accuracy or completeness of the information provided. All investments involve risk, including potential loss of principal. Readers should conduct their own research and consult with a professional advisor before making any financial decisions. I am not an attorney, CPA, or financial advisor.