Shihan Chandrasekara

AI Summary

→ WHAT IT COVERS Shihan Chandrasekara from CoinTracker and Sebastian Derevo from Steakhouse Financial discuss year-end crypto tax strategies, wash sale rules, DeFi risk management, and the evolving landscape of tokenized credit and stablecoin lending protocols. → KEY INSIGHTS - **Tax Loss Harvesting:** Sell crypto assets below cost basis before year-end to realize losses that offset capital gains with no dollar limit, or claim up to three thousand dollars against ordinary income if no gains exist, with excess losses carrying forward to future tax years. - **Crypto Wash Sale Loophole:** Unlike stocks requiring thirty-day waiting periods, crypto wash sales remain legal under current IRS rules since digital assets classify as property not securities, though transactions must demonstrate economic substance beyond tax avoidance to withstand potential audits. - **Exchange Tax Reporting Changes:** Starting 2025 tax year, centralized exchanges issue Form 1099-DA showing only proceeds without cost basis, requiring investors to maintain separate records. Full cost basis reporting begins 2026 but only covers transactions occurring entirely within single exchanges. - **DeFi Risk Management Philosophy:** Steakhouse Financial prioritizes institutional-grade vaults with lower risk profiles, arguing one percent additional annual yield proves worthless with ten percent probability of total capital loss. Prime vaults track Treasury bill rates plus or minus fifty to one hundred basis points. - **Tokenized Credit Complexity:** Private credit products like Fazanara MF1 accrue interest daily but mark down losses only when fund administrators require provisions, creating price charts that appear stable until sudden drops occur, unlike liquid high-yield ETFs with continuous price fluctuations. → NOTABLE MOMENT When Stream Finance lost eighty million dollars, some DeFi lending vaults experienced rapid exodus from two hundred fifty million to sixty million dollars within days, despite prime vaults having no direct exposure, demonstrating how contagion fears drive institutional capital flight regardless of actual risk isolation. 💼 SPONSORS None detected 🏷️ Crypto Taxation, Wash Sale Rules, DeFi Lending, Tokenized Credit, Stablecoin Regulation